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Nearly two million mortgages on payment holiday

Written by: Shekina Tuahene
Around 1.9 million mortgages have been put on payment deferrals in the three months since the support scheme was offered to those affected by coronavirus, UK Finance has revealed.

This means a sixth of all mortgages in the UK are on a payment deferral, 300,000 more than the 1.6 million mortgages which were reported to be on payment holidays in April. 

On average, the suspended payments are £755 per month. 

Homeowners will soon be coming to the end of the three-month payment period and UK Finance said a range of support was available, but advised borrowers who could afford to resume payments to do so as it was better in the long run. 

For borrowers who still require assistance, lenders can offer full or partial payment deferrals, a move to temporary interest-only payments or an extension of the mortgage term to reduce payments. 

In May, an additional three months were added to the payment relief period and customers who have not yet applied for a payment holiday can do so until 31 October.

UK Finance managing director for personal finance, Eric Leenders, said: “Lenders understand that many households will continue to see their finances squeezed as the pandemic continues, and we are working hard to ensure everyone gets the support suited to their needs. 

“The industry has a clear plan to help homeowners get through these tough times, and while it is best for customers to restart their payments if they can, where this is not possible lenders are keen to help, whatever a customer’s financial situation.”

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