Just as some people are stockpiling food, some borrowers are asking for mortgage payment holidays they don’t really need.
This is putting stretched bank staff under further pressure and making it harder for those who do need a payment holiday to get through.
You will have to pay the money back eventually so if you can afford your monthly payments, keep on paying.
If you are struggling, DO NOT just stop payments without speaking to your lender as this breaches your contract and will put you into arrears.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lenders are throwing all their resources into dealing with payment holiday requests. But in the same way that people are stockpiling food they don’t need, there are selfish borrowers who are asking for payment holidays when they don’t need them.
“This is blocking the phone lines for those who do. Borrowers should ask themselves: can I pay the mortgage this month? If the answer is ‘yes’, then keep off the phone to your lender and let those who do need a payment holiday get through and arrange one.
“With Halifax restricting lending to a maximum of 60% loan-to-value (LTV), [i.e. you need a 40% deposit] borrowers may be worried that there is a funding crisis. There isn’t – the banks are awash with liquidity.
“But there are two issues. The first is a processing one – banks are not all set up for staff to work from home. The big processing centres are closed and they are operating with a skeleton staff. Those staff that are working are focusing on arranging payment holidays.
“There is also the issue with valuations. A lot of the big lenders will accept desktop valuations but only to a certain LTV. As they can’t get a valuer out to inspect the property, it is very difficult to process a mortgage application for a higher LTV.”
In addition, not all lenders offer mortgage payments holidays and are now having to build technology systems to accommodate this. HSBC, for example has built the systems from scratch in just two weeks.
Like many lenders HSBC is concerned that the most vulnerable are unable to get through and are asking that wherever possible customers consider managing their interaction through the website or mobile channels.
If people have questions relating to the support their bank or building society is providing, or find themselves in difficulty, many lenders now have a dedicated coronavirus page on their website. HSBC’s coronavirus hub is regularly updated with frequently asked questions and supporting information.
Tracie Pearce, HSBC UK’s director of retail banking, said: “We are here for our customers in these truly extraordinary times. While we put in place a package of support for customers across a number of product areas, we recently added the option of a mortgage payment holiday, which we had not previously offered.”
