A MORTGAGE holiday might sound like a bit of a lark, but for the estimated one in six of us who have had to take them it hasn’t proved a particularly restful vacation.
Back in the early days of lockdown, chancellor Rishi Sunak said that banks would allow customers a three-month break from their mortgage payments if they couldn’t pay them due to coronavirus. He later extended this for a further three months, meaning that some borrowers will not have paid a penny on their home loans since March.
You have until October 31 to request a holiday on your mortgage, so many more people may now be considering this as an option as furlough comes to an end and more people lose their jobs. But experts warn that it isn’t an option to be taken lightly and there may be better alternatives for the financially stretched. ‘The mortgage payment holiday has been a lifeline for many customers,’ says Miles Robinson, head of mortgages at online mortgage broker Trussle. However, he warns that some borrowers may be unaware of the true cost of taking a break from monthly payments, which may lead to huge increases overall, as well as difficulties in applying for new loans. ‘I don’t think it was super-duper clear that you should only take a mortgage holiday out of absolute necessity,’ he says.
‘The banks were very under-resourced when they were handing them out and people were allowed to essentially self-certify whether they needed one or not.’
He urges those who have taken a break from their mortgage payments to look carefully at their finances and work out whether they can start paying again.
ExcludedUK is a newly formed non-profit NGO and serves as a collective platform for those entirely or largely excluded from the UK Government's Covid-19 financial support measures. We are a rapidly growing organisation and an inclusive community, representing a broad spectrum of individuals and businesses, but all sharing one common thread: we are excluded. As an organisation we will play a crucial role in facilitating support and assistance on multiple levels, both for now and into the future. Our aim is to build a stronger platform, raise awareness, lobby for support, raise funds for legal challenges and help enable the changes that are needed for those excluded.Most importantly, our hope is that our efforts can help propel affected individuals and businesses forward in the face of adversity resulting from Covid-19 and being excluded from Government support, while equally ensuring we are all able to help each other emerge from this crisis.