One in nine borrowers freeze mortgage payments
Mortgage lenders have given more than 1.2 million mortgage payment holidays to homeowners who have found themselves in financial difficulty because of the coronavirus pandemic.
One in nine mortgages in the UK are now subject to a payment holiday, the data revealed.
For the average mortgage holder, the payment holiday amounts to £260 per month of suspended interest payments.
The number of mortgage payment holidays in place more than tripled in the two weeks between 25 March and 8 April, growing from 392,130 to 1,240,680.
This is an increase of nearly 850,000 or an average of around 61,000 payment holidays being granted by lenders each day.
Chancellor Rishi Sunak announced the support from banks on 17 March and since then, lenders have been inundated by requests to freeze payments as Covid 19 affects households’ ability to work and threatens livelihoods.
Stephen Jones, chief executive of UK Finance, said: “Mortgage lenders have been working tirelessly to help homeowners get through this challenging period.
“The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.”
Robin Fieth, Building Societies Association CEO, said: “We know that this is a difficult time for many homeowners with a mortgage, and building society staff have been working hard to offer individuals the right solution.
“For almost quarter of a million so far, that has been a three month payment holiday offering a much needed breathing space to families whose household income is under severe pressure during the current crisis.”
‘Not free money’
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lenders should be applauded for enacting government policy within a relatively short period of time, particularly as it has been a big draw on their resources.
“The mortgage is typically most people’s biggest monthly outgoing. For someone with income or employment issues brought on by the pandemic, a payment holiday can be invaluable in covering short-term cashflow issues.”
Borrowers, however, should remember that a payment break is not free money, added Harris, as interest continues to accrue and is added to the overall mortgage debt.