Nearly two million take mortgage 'holidays'

Neatly two million people are taking a mortgage ‘holiday’ because of the coronavirus crisis, according to new figures.

That figure, says trade association UK Finance, represents one in six mortgages in the UK and is part of that it calls "unprecedented" support by the banking and finance industry during the COVID-19 lockdown.

Figures from June show 1.9 million mortgage payment deferrals have been offered to customers along with 27million interest-free overdrafts, 961,700 payment deferrals on credit cards and 688,900 payment deferrals on personal loans.

People can ask their bank or building society for a temporary interest-free overdraft buffer of up to £500.

In some cases, it may be given automatically, depending on the provider.

A spokeswoman for UK Finance

said: "Since the beginning of the crisis the banking and finance industry's core focus has been implementing a plan to get Britain through these tough times.

"The industry has provided unprecedented support to both customers and businesses, and will continue to help those who need it as the crisis continues.

"Throughout these extraordinary circumstances the industry is assisting viable firms so they can continue to trade, lending over £40bn so far through three major Government-backed schemes."

Borrowers looking for a new mortgage deal may find that their choice of home loans has shrunk during the lockdown, particularly if they are a first-time buyer.

By June 26, there were just 14 deals available for borrowers with a 5% deposit, compared with 386 in January.