Coronavirus mortgage relief for homeowners
Date online: 18/03/2020
Speaking at a news conference, Chancellor Rishi Sunak said mortgage lenders will offer a three month mortgage payment holiday to those struggling to pay.
He also said the government would go further if the financial help wasn't enough.
Britain’s banks have revealed how they are going to implement Rishi Sunak’s promise of “payment holidays” of up to three months.
In guidance issued after the chancellor pledged mortgage support for households affected by the coronavirus, UK Finance, the trade body for the major banks, set out how households can apply.
There will be a fast-track system for approval, but not everyone will be granted a payment holiday. The unpaid interest will still be recovered later, but individual credit ratings will not be affected.
“Firms will help customers the best way for the individual, but an automatic payment holiday may not always be the most suitable approach and may not be required by all customers,” said UK Finance.
The holidays will not constitute free money. The banks said they remain obliged under Financial Conduct Authority rules to ensure that any “forbearance” will still assume an eventual full repayment of arrears.
While a person is taking a payment holiday, the interest that would have been paid will still rack up, and the capital sum of the loan remains.