Mortgage payment holidays – what are they and will they help me?

Created 20th March 2020

What is a mortgage payment holiday?

In response to the Coronavirus outbreak lenders are offering three-month mortgage payment holidays to those who have been, or anticipate to be, financially impacted. Lenders are offering varying solutions depending on circumstances whilst cases are being assessed on an individual basis. For example, these solutions could include, switching to interest only for the term or extending your term. It is also important to mention that taking a mortgage holiday will not affect your credit rating.

Is taking a mortgage holiday the right thing to do for me and my family?

There are a few things to consider before deciding whether to take a mortgage payment holiday, if it is the best option for you now and if it will be a good decision over the length of your mortgage term.

• Instead of deferring payments, some may add to the term. In this case, your mortgage payments will be recalculated, and you may see an increase in your monthly payments.

• Due to the way which interest is calculated, the amount you pay over the term will be higher.

• If you are due to switch your mortgage deal soon, now may be the time to do it. Once your payment holiday commences you cannot switch your mortgage to another lender. If you have a re-mortgage in process, this will still go ahead as agreed.

• You may be able to underpay if you have an overpayment reserve.

Will my mortgage holiday request be accepted?

As an example, you can apply for a mortgage payment holiday if you meet the following criteria;

• Your finances have been impacted by Coronavirus.

• Your mortgage payments are up to date

• There is consent from everyone named on the mortgage

How do I apply for a payment holiday?

The vast majority of lenders have implemented a dedicated team to respond to enquiries and advise customers. All you need to do is contact your lender directly and they will guide you to speak to the right team. If you need your account number or any clarification on your lender, your mortgage broker will be able to advise. If any of our current or previous clients require any advice or assistance please feel free to contact us on 0191 260 2000 or email

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