Lenders to give three-month mortgage holiday to those affected by Covid-19

Chancellor, Rishi Sunak, has announced that mortgage lenders will provide a three-month mortgage holiday to people who need help during the Covid-19 outbreak.

Speaking at tonight’s UK coronavirus press conference, Sunak said: “I can announce that for those in difficulty due to coronavirus, mortgage lenders will now offer a three-month mortgage holiday so that people will not have to pay a penny towards their mortgage cost while they get back on their feet.”

The Chancellor, who described the developing situation as “a public health emergency but also an economic emergency”, also promised £330bn of government backed loans would be made available to businesses “small and large”.

“In the coming days I will go much further to support people's financial security,” Sunak added, promising to talk to trade unions and business groups to arrange new support.

Commenting on the new measure, Mortgage Market Alliance director, Rob Griffiths, warned: “Mortgage borrowers who wish to accept a mortgage holiday from their lender need to be fully aware of the detail of such an arrangement and what it actually means for their mortgage payments, the length of their term, and how this might appear on their credit file.

“This is not the lender paying the borrower’s mortgage for them for a three-month period but a deferment of these mortgage payments into the future. With that being the case, borrowers should get the detail of any such arrangement and use their mortgage adviser to provide an explanation of what this actually means for them, and to understand what, if any, other options might be available.”

Hargreaves Lansdown personal finance analyst, Sarah Coles, added: “For people with rent to pay and self-employed workers on very reduced incomes as a result of the crisis, this is likely to offer very little comfort. They’ll have to hold out hope that there’s more on offer in the coming days and weeks.”

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