If you’ve been financially affected by coronavirus, you might be worrying about how you’ll afford your monthly mortgage payments.
Thousands of people have lost some or all their income due to the coronavirus pandemic, but there is help available if you think you’re not going to be able to pay your mortgage.
OnTheMarket has all you need to know.
What happens when you take a coronavirus mortgage holiday?
A mortgage holiday, as the name suggests, is when you take a break from your mortgage payments. It doesn’t mean, however, that your mortgage payments will be covered on your behalf. Instead, any payments you miss are simply deferred and added to your mortgage balance.
Once you start paying your mortgage again, usually after three months, your monthly payments will increase to reflect your higher mortgage balance.
What should I do if I think I’m going to need to take a coronavirus mortgage holiday?
If you think you’re not going to be able to make your next mortgage payment, contact your lender as soon as possible to discuss whether a payment holiday the right option for you. This might take longer than usual as lenders currently are inundated with customer enquiries.
Read more
- How will the three month coronavirus mortgage holiday work?
- Coronavirus: Mortgage advice for homeowners and buyers
- Coronavirus: What financial help is available and how you can claim
If you’re certain that you’re going to need a payment holiday, you may be able to apply for one online, so check your lender’s website to see if this is possible.
What other options are available besides from a taking a coronavirus mortgage holiday?
You may be able to extend your mortgage term so that your monthly payments will reduce. Bear in mind, however, that the longer your term, the more interest you’ll end up repaying overall.
Another option might be to switch your mortgage from a repayment to an interest-only basis, so that you only pay back some the interest you owe each month rather than any of the capital. If you do this, you must have a plan in place to pay off the capital at the end of the mortgage term.
Will taking a coronavirus mortgage holiday affect my ability to borrow in future?
If you haven’t missed any of your mortgage payments, taking a mortgage holiday shouldn’t have any impact on your credit score or your ability to borrow in future.
If you have missed mortgage payments, you can still take a break from your mortgage, but your credit score will be affected by the fact you’ve gone into arrears.
If I have several properties, can I make one application for a coronavirus mortgage holiday for all of them?
If you have more than one property, even if your mortgages are with the same lender, you’ll need to make separate applications to take a mortgage payment holiday for each property.
OnTheMarket has a dedicated page for coronavirus information and advice.
