What Coronavirus Means For Your Mortgage

What Coronavirus Means For Your Mortgage

Coronavirus And Your Mortgage

Over the last couple of months life as we know it has been completely turned upside down. Besides the health concerns for ourselves and loved ones, the question of financial stability concerns a lot of people. Particularly those with mortgages to pay, so you are probably asking yourself “What does Coronavirus Mean For my Mortgage?

There was a small sigh of relief from homeowners back in March when the government brought in 3-month mortgage relief holidays; but what exactly are they?

What Is A Mortgage Payment Holiday?

Mortgage Payment Holidays are a new scheme introduced by lenders; to support homeowners. This includes those with buy-to-let mortgages. A mortgage payment holiday involves you being able to stop or reduce your monthly mortgage payments for up to 3 months. Providing much-needed help for those who have been negatively impacted financially by the coronavirus and are struggling to make payments.  

It’s important to remember that taking a payment break isn’t as simple as just cancelling your direct debit. That will count as a missed payment and could affect your credit rating and ability to remortgage in the future. You need to speak to your lender to discuss your payment difficulties and to begin the application process

Here is a helpful link that explains in detail how to apply for a mortgage payment holiday: https://www.moneyadviceservice.org.uk/en/articles/mortgage-payment-holidays 

If you haven’t yet applied for the payment break and your finances have been affected by the coronavirus outbreak; the deadline for applying has now been extended until October 31st 2020. If the payment break is granted and you’re still having financial difficulties after the initial 3 months; it could be extended by another 3. 

My 3 Month Holiday Is Over. Now What?

No one looks forward to their holiday being over, much less so if it comes with financial worry. Those who have taken a mortgage payment break might be starting to panic. “What do I when my mortgage holiday ends?”.

Before the end of the payment holiday, your lender will be in touch to ask you intend to make up the shortfall. Those missed payments still have to be made. If the impact of the coronavirus means that you are still experiencing financial difficulties, your lender might offer a 3 month extension on your mortgage holiday. I would always advise that as soon as you can afford to restart your mortgage payments you should!

If it’s looking like you’re going to need an extension, make sure you get in touch with your lender. You need to do this well before your mortgage holiday is due to end. Let them know that you’re still having financial difficulties, and are not going to be able to make mortgage payments when the first 3 months are over.

What Are The Pros And Cons Of Taking A Mortgage Holiday?

Of course on the surface of it, taking a mortgage payment break sounds great! Who wouldn’t want to have one less monthly outgoing? – especially at the moment. But, as I warned earlier, it’s not a case of getting free money…


The advantage is clear, isn’t it? Less money going out each month, which gives you a bit of breathing space. This is probably a very welcome idea for those who are unsure when or whether they can get back to work and return to some degree of financial normality. 


Sadly, this is a much longer list. Your mortgage payments for the 3 month period have been frozen, but not forgotten. 

Over the payment holiday period the interest will still be calculated, and then added to the loan, along with the repayment part that you missed. This means that when your payments start up again, your direct debit will be increased to cover the amount added; so you need to think about whether taking the break now will impact you negatively later if you are unable to keep up with the higher payments. 

It’s important that you speak to your lender about a mortgage payment holiday, rather than just stopping your payments. If you do this you’ll be in arrears and your credit will be affected. Which could prevent you from borrowing in the future! If you have taken a mortgage payment holiday after speaking with your lender, then there should be no adverse impact on your credit score. 

With more and more people starting to get concerned about their jobs and whether they will be able to afford to keep their homes. We at More Than Money want to support our local community by offering anyone who has a mortgage, a FREE independent mortgage review. 

Please do get in touch with us if you have a mortgage and are interested in finding out how you could be better off. Our advice is FREE; there will be NO BROKER FEE. To speak to one of our experts please call or CLICK HERE

In conclusion, what does Coronavirus Means For Your Mortgage? Well if you have a mortgage and want to be better off, please give us a call.

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28 years is a long time to do anything and that’s how long I’ve been giving financial advice for! Everything you’ll ever need to know about Mortgages and Home Insurance can be found within the digital walls of this website. Fill your boots with as much knowledge as possible and if you have further questions or would like to get the ball rolling on buying your new home then I would love to help you! I promise to keep things as simple as they need to be and don’t worry about all the paperwork, me and my team can cover that!

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