The past week has seen an unprecedented response from government and mortgage lenders to help support borrowers during the coronavirus outbreak.
Many of our clients have wanted to learn more about the Mortgage Payment Holidays, here are some key points:
- Payment holidays are available to those financially impacted by the coronavirus.
- Payment holidays will be available to all those up to date on their payments.
- Borrowers will still owe the money where a payment holiday has been granted.
- Interest will accrue during the holiday period, deferred payments in the future.
- The payment holiday should not negatively impact borrower credit files.
If you take a mortgage payment holiday, this means that you wouldn’t make mortgage payments for up to three months, these outstanding payments will be added onto your mortgage balance. As a result, your mortgage balance will increase and your monthly payment will be recalculated over your remaining mortgage term. Your monthly payment and the amount of interest you pay will increase for the remaining term of your mortgage.
If borrowers are concerned about making mortgage payments they should contact their mortgage provider as soon as possible.