Mortgage Payment Holidays Update…What You Need To Know!

18th Nov 2020

The Financial Conduct Authority (FCA) has confirmed an extension to the mortgage payment support originally announced earlier this year.

Here’s what you need to know.

I’ve not yet had a payment holiday…can I take one? 

If you have not yet had a mortgage holiday, you are eligible for a payment holiday of up to 6 months.

I’ve already taken a 6 month payment holiday on my mortgage…can I have an extension?

If you have already had a payment holiday on your mortgage that totals six months, you will not be eligible for a further payment holiday. However, further tailored support may be available from your mortgage lender directly.

I’ve already taken a payment holiday but not the full 6 months…can I take another one? 

If you have previously had or currently have a mortgage payment holiday and have not yet used the six months holiday, you are able to top up their payment holiday to six months in total.

How long do I have to apply? 

You have until March 31st 2021 to apply for an initial or further payment holiday. All payment holidays must be finished by the end of July 2021.

When do the new rule come into effect?

The new rules come into force on the 20th November.

Will my credit file be impacted? 

A mortgage payment holiday under these rules will not be reported as a missed payment on a borrower’s credit file. However your ability to access credit (e.g. a new mortgage) in the future may be affected.

Should I take a payment holiday?

if you are able to keep paying it will be in your best long-term interest to do so. Payment holidays should only be taken when absolutely necessary.

What else should I consider before taking a payment holiday on my mortgage? 

There are many things to consider before taking a payment holiday. Read more here.

Remember, if you decide that you need to take a payment holiday, it is important to speak to your mortgage lender first. DO NOT just cancel your direct debit.

If you have any questions or would like to discuss the options available to you, contact us today.

Steven & Laura Lyons

*Your home may be repossessed if you do not keep up repayments on your mortgage.

** You should contact your existing mortgage lender for advice about taking a payment holiday.