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Mortgage payment holiday extended for further three months

Homeowners struggling financially due to Covid-19 have the opportunity to extend their mortgage payment holiday for a further three months, or cut payments.


Mortgage holidays started in March, allowing people to delay payments without affecting their credit rating.

Payments at halt would end for the first applicants in June and the Treasury said the extension would provide certainty for those affected.


However, the Treasury mentioned borrowers should still pay their mortgages if they are able.


Payments are still expected to be paid back later on, which means mortgage customers will face higher bills once the so-called holiday ends.


The Treasury are concerned a sudden end to the scheme could cause families to be in worse financial positions.

Christopher Woolard, interim chief executive at financial regulator the Financial Conduct Authority (FCA), argued that if customers could afford to restart mortgage payments "it is in their best interests to do so".


"But where they can't, a range of further support will be available," he added.


The date for homeowners to apply to extend their mortgage holidays has also been extended, with customers able to apply until the end of July.

More than 1.8 million mortgage customers have taken advantage of this scheme from making payments so far. The banking body, UK Finance, estimates this is an average of £755 a month.


Lenders will be expected to contact customers affected by the extension, to discuss the choices available to them.


"Some may be able to resume their full monthly payments, others may be able to pay a proportion of their monthly payment, or temporarily switch to an interest only mortgage, and others will opt to extend their mortgage payment holiday," the government said.


Source: BBC News

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