One in seven mortgage holders in the UK are now subject to a mortgage payment holiday.
According to UK Finance, over 1.6 million mortgage payment holidays have been utilised by homeowners affected by Covid-19 saving an average of £755 per month.
More than 1.2 million mortgage payment holidays were approved between March 25 and April 1, in the week after the scheme was launched. Throughout April, around 700,000 payment holidays have been granted.
UK Finance has also highlighted that lenders are offering product transfers during the the mortgage holiday for customers at the end of their fixed term and meet the eligibility criteria.
Many lenders are also offering the mortgage holiday by completing a simple online form given the reduced capacity in call centres and increased demand causing delays in telephone communication.
Recent data from Twenty7Tec found that whilst remortgage searches had increased by 1.03 per cent on the same figures a week earlier they are still down by a quarter on a month ago. This may be due to the fact that so many people are now using the mortgage holiday scheme.
Stephen Jones, UK Finance CEO, said:
“Lenders understand that many households are seeing their finances squeezed due to the coronavirus pandemic and we are working hard to help customers get through these tough times.
“The industry has acted quickly to support homeowners through this crisis and has taken decisive steps to ensure that eligible customers on payment holidays due to Covid-19 can opt for the security of fixing their monthly mortgage payments going forward.
“There is a range of support available to mortgage holders concerned about their finances. We would encourage any homeowners impacted by coronavirus to visit their lender’s website in the first instance to find out more information and how to apply.”
Robin Fieth, Chief Executive of the Building Societies Association (BSA), commented:
“The Covid-19 situation means that right now times are far from normal and many households are worried about their finances. Lenders are working hard to help in a range of ways and it is right that this now includes the ability for those on a three-month payment holiday to be able to switch onto a new product with their existing lender at the end of a fixed term product should the two events coincide.”
Kate Davies, Executive Director of the Intermediary Mortgage Lenders Association (IMLA), commented:
“This agreement builds on the commitment made by lenders in July 2018 to contact customers who are coming to the end of a mortgage deal and discuss what alternative options might be available.
“It offers additional – and no doubt welcome – reassurance that customers will not be penalised if they have sought an approved payment holiday during this difficult period.”
