The Government has promised that homeowners whose income is affected by the coronavirus/Covid-19 outbreak will be eligible for mortgage payment relief in the form, initially, of a suspension of repayments for three months.
Is everyone eligible?
No. Although the majority of borrowers will qualify for the scheme, it is not available to those who are already in arrears with their mortgage payments. If you are already in arrears on your mortgage, you should speak to your lender as a matter of urgency in order to reach an agreement with them to cover the immediate foreseeable future.
Will I be subjected to affordability checks if I apply for a payment ‘holiday’ due to coronavirus?
No. The Government’s objective is for lenders to make the process as simple as possible in order to ensure relief is delivered quickly. That means your lender will forego the usual affordability assessment, which was designed to make sure borrowers would be able to resume their payments at the end of the ‘holiday’ term.
However, you may – and probably will – be asked by to self-certify that in all other respects, your circumstances have not changed.
How will the scheme work?
You can request approval for mortgage payment relief over the phone, however, most lenders are currently experiencing extremely high call demand and it may be quicker and easier to complete a short online form if your lender offers that option. In most cases, completing the form should take no more than a couple of minutes.
In the majority of cases, you should receive a decision on your application very quickly (and if your application is made over the phone, you’ll likely get an instant decision). However, some lenders are saying they will issue decisions within 3-5 working days.
Once approved, your monthly repayment will immediately be set to £0 and will be reinstated at the end of the 3-month period.
Note that although your payment will cease temporarily, you will still accrue interest on the outstanding capital debt, meaning that your mortgage balance will be higher at the end of the ‘holiday’ period.
Will my credit score be affected?
No. The Government has been very clear that where non-payment has been formally agreed through this scheme, there will be no impact on your credit history.
Are there other relief options available?
At the time of publication, this is currently the only official scheme to provide mortgage relief that is endorsed and mandated by the Government.
However, and as we’ve already said, you should remember that you will continue to accrue interest on your loan, so if you’re in a position to pay even a small amount – and many people aren’t at the moment, of course – then that will always be better than paying nothing.
If you think that’s an option for you, talk to your lender about agreeing to underpay.
Useful phone numbers
If you wish to talk to your lender about mortgage relief, these are the telephone numbers for the main banks and building societies. Your lender may also have set up a specific helpline number which could be more expedient, so if you are able to it may be worth checking your lender’s website for the most up to date contact information.
Accord Mortgages: 0345 1200 866
Barclays: 0800 022 4022
BM Solutions: 0345 850 5000
Clydesdale Bank: 0800 121 4203
Coventry Building Society: 0800 121 8899
Halifax: 0345 850 3705
HSBC: 03457 404 404
Leeds Building Society: 0113 225 7972
Lloyds: 0800 783 3534
Monmouthshire Building Society: 01633 844 370
Nationwide: 0800 464 30 30
Natwest: 0800 092 9585
Platform (Co-op): 01752 236 550
Post Office (BOI): 0800 707 6206
RBS: 0345 721 2600
Santander: 0800 01 56 382
Skipton Building Society: 0800 022 4022
TSB: 0345 835 3380
Virgin: 0345 602 8301
If you’re unsure about the best course of action during the current crisis when it comes to your mortgage or personal income protection, or perhaps you feel you could benefit from professional advice to give you peace of mind, why not get in touch with our friendly team?
Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.