Vulnerable will get 3-month mortgage break

HOUSEHOLDS plunged into financial difficulty by the coronavirus outbreak will be offered mortgage ‘holidays’ of at least three months, the Chancellor announced yesterday.

Rishi Sunak promised anyone struggling because of the virus will ‘not have to pay a penny towards their mortgage while they get back on their feet’.

Experts said a household with a typical mortgage would be able to delay paying more than £2,000 over three months. The interest will be added to the outstanding loan and repaid later.

Those eligible could include small business owners who have suffered a slump in income. It could also cover those unable to work through illness but not entitled to sick pay, such as the self-employed or those on zero hours contracts. Last night consumer campaigners described the intervention as an ‘important first step’ to support millions of workers in hard-hit industries.

UK Finance, which represents lenders, explained how the move will work. There will be a fast-track approval system but not all households who apply for a mortgage holiday will qualify for help.

Individual credit ratings of customers will not be affected, addressing fears that a mortgage holiday will count as a late or missed repayment. Lenders also stressed that they will still have to comply with forbearance regulations to ensure that the mortgage can be repaid in full.

UK Finance said: ‘Firms will help customers the best way for the individual but an automatic payment holiday may not always be the most suitable approach and may not be required by all customers.’