Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.
With mortgage payment holidays that were introduced to help those financially impacted by the Coronavirus pandemic starting to come to an end, we’ve taken a look at what options are available to consumers who have taken out a mortgage payment holiday.
Mortgage borrowers who have been financially impacted by the Coronavirus pandemic can apply to extend their mortgage repayment holiday. Applications can be made until 31 October 2020, but there is no guarantee that the mortgage lender has to accept the application. The payment holiday extension applies to those who have not yet requested a payment holiday, and new applicants also have until the end of October 2020 to apply. Those who want to apply for a mortgage repayment holiday should contact their mortgage provider as soon as possible to discuss their options.
Although a mortgage payment holiday provides mortgage borrowers with breathing room as they manage their finances during this time of economic uncertainty, those who are struggling financially should consider whether it is the best option for them. For example, if the borrower is able to make partial repayments or temporarily switch to interest-only repayments, these might be better options in the long-term. In addition to this, those who are able to return to full mortgage repayments are encouraged to do so as soon as they are financially able.
As interest continues to be accumulated on the mortgage debt during the payment holiday, the longer the payment holiday is taken out, the higher the repayments could be once the borrower returns to full repayments. It is for this reason that borrowers are encouraged to return to full repayments as soon as possible. Eleanor Williams, finance expert at Moneyfacts.co.uk, explained: “Borrowers returning to full monthly repayments after a three-month payment holiday could potentially see their monthly mortgage repayments increase by approximately £14.00* per month.” Alternatively, borrowers could choose to lengthen the term of their mortgage, which would reduce the new repayment but will mean that interest continues to be added for the longer length of the mortgage term. Borrowers returning to full repayments should speak to their lender to discuss their best options.
Although there are no fees involved with the three-month payment holiday being offered due to the Coronavirus pandemic, as already explained, borrowers should be aware that interest will continue to be added to their mortgage loan during the payment holiday.
The Financial Conduct Authority (FCA) has stated that payment holidays offered due to borrowers being impacted by the pandemic should not have a negative impact on their credit file. However, borrowers should be aware that credit files are not the only source of information lenders can use when assessing creditworthiness.
*Based on a balance of £150,000 over a 25 year term, on an initial rate of 2.52% (average two-year fixed mortgage rate January 2019), on the assumption that interest and monthly repayments during the payment holiday are recapitalised into the outstanding mortgage balance for the remaining term (not extended), and on the basis that payments will continue on the initial interest rate.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
Each week the moneyfacts.co.uk content team round up the very best mortgage rates available in the UK. Compare and apply today.
Each week the moneyfacts.co.uk content team round up the very best mortgage rates available in the UK. Compare and apply today.
As the cost of living crisis continues to dominate headlines, data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that average mortgage rates continue to increase, with the average overall two-year fixed rate rising above 3% for the first time in over seven years.
Data from the latest Moneyfacts Mortgage Treasury Report shows that average mortgage rates continue to rise.
The Bank of England has today increased base rate by 0.25%, up from 0.75% to 1.00%. The decision to increase base rate will be disappointing news to consumers who are already facing a cost of living crisis, with further rises anticipated over the next 12 months. Borrowers sitting on a variable rate may want to lock into a competitive fixed rate mortgage deal to protect themselves from rising interest rates, perhaps sooner rather than later as fixed rates rise, with the average two-year fixed rate surpassing 3.00%.
The Bank of England has today increased base rate by 0.25%, up from 0.75% to 1.00%.
Each week the moneyfacts.co.uk content team round up the very best mortgage rates available in the UK. Compare and apply today.
Each week the moneyfacts.co.uk content team round up the very best mortgage rates available in the UK. Compare and apply today.
As the cost of living crisis continues to dominate headlines, data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that average mortgage rates continue to increase, with the average overall two-year fixed rate rising above 3% for the first time in over seven years.
Data from the latest Moneyfacts Mortgage Treasury Report shows that average mortgage rates continue to rise.
The Bank of England has today increased base rate by 0.25%, up from 0.75% to 1.00%. The decision to increase base rate will be disappointing news to consumers who are already facing a cost of living crisis, with further rises anticipated over the next 12 months. Borrowers sitting on a variable rate may want to lock into a competitive fixed rate mortgage deal to protect themselves from rising interest rates, perhaps sooner rather than later as fixed rates rise, with the average two-year fixed rate surpassing 3.00%.
The Bank of England has today increased base rate by 0.25%, up from 0.75% to 1.00%.
Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.
I accept. Read our Cookie Policy