New figures released by UK Finance show that 1.9 million borrowers have opted to take advantage of the mortgage payment ‘holidays’ since these were first offered three months ago.
This means that one out of every six UK mortgages is currently being deferred under this scheme. A number of those who opted into it when it was initially launched are now nearing the end of their deferment period though, which means mortgage lenders are looking to put together plans for resuming payments that the borrowers can afford, based on the impact that the pandemic has had on their finances.
Customers who are in that position will be contacted by their mortgage lender just before the ‘holiday’ period comes to an end and provided with different repayment options, so that they can reach agreement with the lender on a plan that is within their budget.
Among the choices that they are likely to be given are to defer all or part of the repayments for longer; paying only interest on the mortgage at first; or cutting repayments by having the mortgage term run for longer.
Eric Leenders from UK Finance told Mortgage Introducer that:
“The industry has a clear plan to help homeowners get through these tough times, and whilst it is best for customers to restart their payments if they can, where this is not possible lenders are keen to help, whatever a customer’s financial situation.”
Support from an advisor with a CeMAP qualification could also be useful to borrowers in this situation.