I can’t pay my mortgage
The banks have agreed with the government to give homeowners a three-month mortgage holiday to those who need it.
If you have lost your job or now have much less income due to coronavirus, this could give you some much-needed breathing space and help you get back on your feet.
Buy-to-let mortgages are also eligible for this payment holiday.
If I take a mortgage holiday, when do I make the payments up?
In most cases, the payments you miss during your mortgage holiday will be spread across the rest of your mortgage.
This means there will be a small increase to the monthly repayments afterwards, and you should think how this will affect your finances in future. Your payment date won’t change.
Are there any exceptions?
This payment holiday is designed for any homeowner affected by coronavirus. The mortgage provider will want to get your holiday approved quickly, so it’s likely you won’t have to pass any affordability checks, but this might not be the case with all mortgage providers.
If you can’t afford a higher monthly repayment, some mortgage providers might consider extending your mortgage. This will likely be assessed on a case-by-case basis, so it’s best to speak with your lender.
Will I pay interest during my mortgage holiday?
Yes. While you won’t have to pay anything during your mortgage holiday, you’ll still rack up interest. This means you’ll likely pay more overall.
How do I get a mortgage holiday?
Get in touch with your mortgage provider as soon as you can to talk through your options. It’s best to do this sooner rather than later if you’re struggling to stay on top of your repayments. Keep in mind, banks and lenders are likely to be much busier than usual.
You can find the application form for a mortgage payment holiday below. Click the name of the bank to go to their website. If your mortgage provider isn't listed, visit their website.
Coventry Building Society
Yorkshire Building Society
Will a mortgage holiday affect my credit score?
If you have an agreement with your lender, such as a mortgage holiday, it won’t affect your credit score.
If you miss a mortgage payment without an agreement in place, it will be treated as a missed payment and could harm your score.
You can see if your payment holiday has been recorded by the lender by checking your free credit report. If it shows a missed payment, you can raise a dispute on your report to get it sorted. You should also double-check with your lender, to make sure it doesn’t happen again next month.
It’s best to check your report on a regular basis, as it may take a while to update.Check my credit report now
If you make sure everything is as it should be now, it'll make it easier when things go back to normal. With a good credit score, you can get the credit you need when you need it, improve your financial footing, and move on up to a better future.
What do interest rate drops mean for my mortgage?
The Bank of England has cut the base interest rate to 0.1%. This is a historic low rate and could affect your mortgage, depending on the type of mortgage you have or apply for.
- Tracker mortgages
A tracker mortgage is based on the Bank of England’s base rate, plus a percentage on top of that. Now the Bank of England has reduced the base rate to 0.1%, your monthly repayments should decrease.
- Variable mortgages
Lenders may reduce their interest rates, but this is their decision. Get in touch with your mortgage provider to find out.
- Fixed mortgages
Unfortunately, the rate you have will stay the same until the fixed period ends.
- New mortgages
You can still apply for a new mortgage, but it might take longer. For example, if a surveyor needs to visit your home, you might have to wait until the lockdown ends. Plus, banks and lenders are likely to be busier than usual, so it could take longer for them to process your application.
Should I remortgage?
With the interest rates significantly lower, remortgaging could help to reduce your monthly outgoings. But, check if you have to pay an early repayment charge, as this could make it less cost-effective.
If your current mortgage deal is due to end in a few months, you'll likely automatically move onto a standard variable rate, which could cost you more. Your lender should contact beforehand, so you won't forget. But, if you don't hear from them, contact them to find out if you can get a better deal when it ends.
Be sure to look around at other lenders as well. Although there are fewer deals out there at the moment due to coronavirus, you could find a cheaper deal elsewhere.
I’m self-employed — can I still get a mortgage holiday?
Yes. If you’re struggling to keep on top of your repayments due to coronavirus, get in touch with your lender to talk through your options.