Mortgage payment holidays: eligible borrowers only have until Wednesday 31 March to apply

The window for borrowers to apply for a payment holiday on products like mortgages, personal loans and credit cards is closing fast.

Eligible customers who have not taken a payment holiday before, and those who have previously had a payment deferral totalling less than six months, have until Wednesday 31 March to apply.

The exact timing of the moment applications closes could vary, but it is generally expected to be towards the end of the day.

Even so, customers may not want to leave applications until the last minute, as the amount of time they take to complete can depend on how customers interact with their lenders.

Mortgage payment holidays have provided some welcome breathing space for homeowners, who’ve struggled with their bills due to the pandemic.

Lenders will provide ‘tailored support’

The Financial Conduct Authority (FCA) has said previously that as demand for payment holidays reduces, lenders will provide a range of tailored support based on customers’ individual needs and circumstances.

The regulator said firms are expected to ensure all staff are adequately trained and have appropriate oversight of new staff to ensure the right support is provided to customers.

According to finance industry trade association UK Finance, a cumulative 2.75 million mortgage payment deferrals were granted up until the end of 2020, with 1.8 million in place at the peak in June 2020.

By late February 2021, there were 104,000 mortgage payment deferrals still in place, equating to 0.9 per cent of the total mortgage stock, compared with 17 per cent of the total mortgage stock at the peak in June 2020.

How long can mortgage payment holidays last?

Mortgage payment holidays can last up to a maximum of six months.

So even if a homeowner has already had a mortgage payment holiday but it has lasted for less than six months, they may be able to get a further deferral – up to the six-month maximum total.

It’s also important to bear in mind that all mortgage payment holidays will end on 31 July 2021.

If you’ve already had a full six months of payment holidays, but you are still struggling to meet your mortgage payments, your lender should offer you continued support that is tailored to your needs.

UK Finance has more details about mortgage payment holidays and how they work on its website.

Payment resumption ‘in the long-term interest of borrowers’

Charles Roe, director of mortgages at UK Finance, said: “Millions of people whose finances have been impacted by the pandemic have already received support from their lender through a mortgage payment deferral.

“The payment deferral scheme will be in place until 31 July to support customers through the continuing restrictions, with final applications due by 31 March. It will always be in the long-term interest of borrowers to resume making payments if they are able to do so.

Roe also said that for anyone who is still struggling, ongoing support will be available, including tailored assistance for those who have taken a full six-month payment deferral, or those who find themselves needing help after 31 March.

“I would urge customers experiencing financial difficulty to contact their lender as soon as possible,” he added.

Rich Horner, head of individual protection at MetLife, said it is “imperative” that prospective buyers and current homeowners “consider their current financial position and ensure that they are protected against any unforeseen circumstances or illnesses” that could leave them unable to meet their mortgage payments.”

Additional reporting by Press Association