Money.co.uk: Mortgage holiday extension will be welcomed by many

Jessica Bird

May 22, 2020

fca payment deferrals

Although official confirmation is yet to appear, the possibility of a mortgage holiday extension is a welcome one, according to money.co.uk. 

Salman Haqqi, personal finance expert at money.co.uk, said: “The government’s initial launch of mortgage holidays brought welcome relief for homeowners who had their income affected by the COVID-19 crisis.

“The scheme, where payment could be deferred with zero negative impact to credit ratings, resulted in up to one in nine homeowners making use of the initiative.

“Though a formal announcement is yet to be made, many businesses are still closed and the full extent of job losses is still becoming clear, so any extension to the scheme will be welcomed.”

However, Haqqi added that payment holidays should still be entered with care.

He said: “Should homeowners wish to look into a payment holiday on their mortgage, it’s important to remember that you will still owe the money and interest will continue to accrue while the deferred payments remain unpaid.

“This means that your monthly payments will likely go up slightly after the payment holiday ends.

“While the option to take a payment holiday on mortgages will have been a lifeline for many, if you are still able to make your payments in full, you should continue to do so.”

Sign up to our daily email