Online mortgage broker, Trussle, has urged homeowners in financial difficulty to consider the pros and cons of a mortgage holiday, ahead of the deadline for the government-backed scheme.
The deadline for applying for a mortgage payment holiday is 31 March 2021.
Currently, any homeowners who have yet to take a holiday on their mortgage payments have a week to apply for a deferral of up to six months in total.
According to Trussle, over 2.75 million homeowners have been granted a mortgage payment holiday since the outbreak of coronavirus in the UK last year. The broker has also estimated that 130,000 households still had an agreed mortgage holiday in place at the beginning of 2021.
Trussle head of mortgages, Miles Robinson, called the deferrals an “important lifeline” for those who have suffered financially as a result of the pandemic.
“For those who are considering taking a mortgage payment holiday in the near future, now is the time to think about whether it’s the right decision for you,” Robinson said.
“A mortgage payment holiday can be a good way to reduce your monthly outgoings if you are facing a period of financial difficulty. However, we’d encourage homeowners who have been financially impacted by the coronavirus outbreak to speak to their broker or lender to explore their options before making a decision.
“This is because once the mortgage payment holiday is up, your monthly payments will increase slightly as the additional interest is added to the total mortgage balance. Taking a mortgage payment holiday because of coronavirus should not affect your credit score if you've got your lender's permission, but it’s best to check with your lender first.
“It’s definitely worth considering whether taking a mortgage payment holiday is a necessity or if taking an alternative route, such as remortgaging could be more beneficial in the long run. Homeowners can save £334 on average per month by remortgaging onto a fixed rate.”
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