Coronavirus and Mortgage ‘Holidays'
Read what it means for home-owners.
Home-owners facing financial difficulties due to the consequences of the spread of the coronavirus will be offered a three month mortgage ‘holiday’.
The Chancellor’s announcement during his recent coronavirus briefing came as part of a large financial package to keep the economy running. This mortgage ‘holiday’ is designed to help those who cannot work because they may, for example, be self-isolating or on zero hours contract and are consequently not earning any or enough money to pay for all that is required at this difficult time.
It is important to note that this ‘holiday’ is simply that. This means that the mortgage arrears will need to be cleared at some point to avoid any penalty and interest charges. Interest will however continue to accrue during the payment holiday. It is possible that some may be given more time to pay however, given the announcement was made yesterday details are quite sparse and mortgage companies will no doubt have their own plans in place too.
What is interesting is that this announcement did not include anything directed at those who rent. The private rental market is also going to be impacted, especially for those on a low income. Therefore, tenants will no doubt be somewhat aggrieved by this. Similarly, the mortgage holiday arrangement is restricted to homeowners and is not available to landlords, although individual banks might choose to offer something. Whilst the government is no doubt happy to discuss payment holidays with big banks it cannot easily force landlords to make similar arrangements with their tenants.