Over 1.2m mortgage payment holidays have been offered by lenders to customers impacted by the Coronavirus crisis - that’s equivalent to one in every nine mortgages.
The number of payment holidays in place more than tripled in the two weeks between March 25 and April 8 with an average of some 61,000 being granted each day.
For the average mortgage holder, the payment holiday amounts to £260 per month of suspended interest payments, with many benefitting from the option of extending the scheme for up to three months.
“For almost quarter of a million so far, that has been a three month payment holiday offering a much needed breathing space to families whose household income is under severe pressure during the current crisis” explains Robin Fieth, chief executive of the Building Societies Association.
Lenders are also urging mortgage holders not to cancel their direct debits before a payment holiday has been agreed, as this will be counted as a missed payment and could impact their credit file.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says in response to the news: “Borrowers should remember that this is not ‘free’ money. During the payment holiday, interest is added to the mortgage and will be owed afterwards.
“With approximately 11 million mortgages in the UK, there is potentially some way to go in agreeing a mortgage payment holiday for everyone who needs it. But not all borrowers have been affected to the same extent by Coronavirus so if you are able to do so, consider maintaining your mortgage payments at the usual level or even partial payments.
“Speak to your lender first before making any decisions with regard to taking a payment holiday. Agree to a way forward and remember not to cancel anything until it has all been agreed - otherwise, it could impact your credit rating, which could cause you issues long after we return to ’normal’.”