If you are financially affected by coronavirus and would like to apply for a mortgage payment holiday or to extend an existing one, you need to do so by 31st October 2020.
After this date, there will still be support available which will be tailored to your individual circumstances, but these may impact your credit file.
What is a mortgage payment holiday?
If you’re worried about paying your mortgage during the coronavirus outbreak, a payment holiday enables you to pause your monthly payments for a temporary period. Following revised guidance from the Financial Conduct Authority (FCA), payment holidays are now also referred to as ‘payment deferrals’. So, you may see, or hear, this phrase used elsewhere.
Although no monthly payments will be due during your payment holiday, interest will continue to accrue and will be added to your loan balance. This will result in an increase to your monthly payments when they restart at the end of the payment holiday and in the total cost of your borrowing.
If you’re able to afford any payments during your payment holiday, even if they’re less than your current monthly payment, we encourage you to make them. If you do, it will reduce the impact on your future monthly payments and total cost of borrowing at the end of the payment holiday.
Although taking a payment holiday won’t negatively impact your credit file, keep in mind that lenders may take into account other information when making future lending decisions.