Gillespie Gifford & Brown

Struggling to pay your mortgage?


When the UK went into lockdown, many companies considered immediately laying off their workforce – and some went ahead and did that. Others have relied on the UK Government’s furlough scheme and are paying their employees 80% of their monthly wage.

It’s no surprise as a result of either having to rely on Universal Credit or 80% of their wage that some people have run into financial difficulties.

In recognition of this problem, mortgage lenders agreed with the government to allow borrowers to take a mortgage payment holiday of up to three months. In the course of the last few weeks and as we move slowly out of lockdown, UK finance has announced that mortgage lenders have agreed to extend this scheme until 31 October. This means there is the prospect of being granted a mortgage payment holiday of up to six months.

We would stress, however, whilst the mortgage payment holiday means you don’t have to pay your monthly mortgage instalment, interest will continue to run against the mortgage balance. At the end of the payment holiday, you’ll need to make arrangements with your lenders to either adjust your mortgage instalments to clear off the additional interest or to extend the term of your mortgage to take account of the additional interest.

Steven Jones, the CEO of UK Finance said: “Mortgage lenders are committed to providing those borrowers nearing the end of their three-month payment holiday with help and flexibility in choosing the next steps which best suit their needs.”

One of the qualifying conditions is that you are up to date with your mortgage payments. However, even if you’re not up to date, your mortgage lender may be able to help, depending on your circumstances.

Repossessions stopped

In addition to the mortgage payment holidays agreed with mortgage lenders, the UK government also agree with them that all repossessions would be suspended until 31 October 2020. That means those who are in arrears of their mortgage and are facing the threat of repossession cannot be evicted from their home before 31 October.

Whatever you do, if you are struggling with your mortgage repayments during the coronavirus crisis or after it, you should contact your lender to discuss options.

Remember, you’ll almost certainly get more money from the sale of your property if you sell it yourself rather than allowing your mortgage lender to repossess and sell it. That means you won’t end up with as large a debt after the house is sold.

If we can be of any assistance, please get in touch.

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