Mortgage payment deferrals – or ‘mortgage holidays – were introduced when the first lockdown began in March to support homeowners who were struggling to make their monthly payments.
As many as 1.8 million people took advantage of the scheme and at its peak in June one in six mortgages were subject to deferrals, according to the body which represents mortgage lenders, UK Finance.
As Covid restrictions have once again tightened, the mortgage holiday scheme was extended to July 2021.
This means anyone who had not taken a payment holiday previously, or who had not benefited from deferrals for a full six months, could speak to their lender about the possibility of using the scheme.
However, UK Finance is today reminding borrowers who want to make a deferral that they must apply to their lender by February if they want to benefit from the full deferral period of up to six months.
Eric Leenders, managing director of personal finance at UK Finance, said: “Millions of people whose finances have been impacted by the pandemic have already received support from their lender through a mortgage payment deferral.
“With new lockdown restrictions in place, the banking and finance industry is continuing to help customers through these challenging times, including by providing tailored support appropriate to their needs.
“It will always be in the long-term interest of borrowers to resume making payments if they are able to do so. However, for anyone who is still struggling ongoing support will be available, and so we would urge customers to contact their lender to discuss their options before missing a payment.”
Mortgage lenders have pledged to continue to support both residential and buy-to-let mortgage customers facing financial difficulties due to Covid-19 over the coming months.
As set out by the Financial Conduct Authority, customers have until 31 March to apply for or extend a mortgage payment deferral but should speak to their lender before February to ensure the process is put in place in time.
Lenders have also announced their support for an extension of the moratorium on possessions until 1 April 2021, to provide reassurance to both residential and buy-to-let borrowers that they will not have their homes repossessed at this difficult time.
