Coronavirus and mortgage payment holidays
It really is unprecedented times we live in, if you need to take advantage of a mortgage payment holiday, don’t worry, we are here to help.
The biggest financial outgoing for most households will be your monthly mortgage payments. If you have suffered financially from the effects of coronavirus, you will be relieved to know that you may be eligible for a payment holiday of up to three months.
This payment holiday will give you the flexibility to reduce or postpone your monthly payments for up to three months. This option may not be suitable for all circumstances, please discuss with your broker before making any decision.
Once you have discussed your circumstances with your broker, if you wanted to proceed with the payment holiday, the first step is to contact your lender directly. We must highlight that not everyone will be eligible for the payment holiday, which is why we always encourage you to speak with your broker. That said, lenders will have a fast track process in place in order for you to obtain a decision quickly.
If you choose to take advantage of the payment holiday, It’s likely the lender will spread your outstanding payments over the outstanding term of your mortgage. This will result in an increase to your monthly mortgage payments. The shorter the term left on your mortgage, the larger the increase in your monthly payments will be. We encourage you to consider the impact it may have on any future financial commitments.
Some lenders may encourage you to extend your mortgage term, to help mitigate the financial difference. This is another reason to get in touch with your broker to discuss all options available to you.
What is a mortgage payment holiday?
A mortgage payment holiday is an agreement you might be able to make with your lender. It allows you to temporarily stop or reduce your monthly mortgage repayments. This option was available before the coronavirus outbreak, however, it has been known to impact your credit rating. This is something you would have to question on application.