You are here: Home - Mortgages - Remortgage - News -

Borrowers used mortgage payment holiday to build cash buffer

0
Written by: Samantha Partington
14/10/2020
Half of borrowers who deferred their mortgage payments as part of the government’s coronavirus support measures have not suffered any decline in their spare income, research suggests.

A further quarter of households on a payment holiday have seen their disposable income increase, choosing to take the payment holiday to build up a reserve fund in case their future earnings decline.

Currently, around 1.9 million mortgage accounts are in the payment deferment scheme. The average balance of a borrower who has taken a payment holiday is £150,000, 30% higher than the £114,000 average balance of a borrower who has not used the scheme.

Mortgage applications increased year-on-year by 13% in July, followed by rises of 25% in both August and September and the market is on track to lend £216bn this year, according to the analysis from Experian.

Due to the lockdown restrictions, lending is expected to be down on last year’s total of £250bn.

Lisa Fretwell, managing director of data services at Experian, said: “People moving home is good news for the economy, as activity in the property market fuels growth in related services.

“Most moves require a mortgage and, while lenders want to extend new loans, they have a responsibility to ensure homebuyers are only taking on what they can afford in the long-term.

“Covid-19 has complicated the financial situation for millions of people, and the challenge for lenders to understand each applicant’s circumstances has become more difficult as a result.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Apple launches iPhone 12, 12 Mini, 12 Pro and 12 Pro Max

Apple has officially unveiled the new iPhone 12 range with handset prices starting at £699 and going up to £1,399.

Close