Banks and building societies in the UK have granted 1.2 million people holidays on mortgage payments due to the coronavirus pandemic.
Industry lobby group UK Finance said on Monday that one in nine mortgage customers in the UK had now paused repayments due to COVID-19. The numbers have tripled over the last two weeks and an average of 61,000 mortgage holidays are being granted each day.
“Mortgage lenders have been working tirelessly to help homeowners get through this challenging period,” said Stephen Jones, chief executive of UK Finance.
“The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.”
Banks announced in the middle of last month that they would allow customers to apply for mortgage holidays due to coronavirus, allowing them to defer payments for months.
While mortgages will still accrue interest and customers must still pay back the full amount eventually, the payment holidays are meant to ease the pressure on personal finances during the shutdown of the economy linked to COVID-19. Customers who ask for payment holidays must certify that their income has been either directly or indirectly affected by the pandemic.
Jones said payment holidays “aren’t always the right solution for everyone” and urged customers to “check with their lender so they can find out more information on the support available and how to apply.”
Customers are also being warned not to simply cancel direct debits without getting a mortgage holiday approved. Doing so could adversely impact people’s credit ratings.
As well as mortgage holidays, the UK regulator last week introduced new rules requiring banks to offer customers three month repayment holidays on credit cards and loans. Banks have also relaxed overdraft fees in response to the novel coronavirus pandemic.
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