Mortgage and loan payment holidays extended for a further six months

Following the introduction of tough new Coronavirus restrictions in England, the Government has confirmed that mortgage payment holidays will be extended to 31 March 2021 to borrowers impacted by Coronavirus. The scheme had been due to end on 31 October 2020.

All borrowers affected by Coronavirus will be entitled to the six-month mortgage payment holiday. This includes those that have already benefitted from a mortgage payment holiday, who will be able to top this up to six months without a record being made on their credit file.

Earlier in the year, the Financial Conduct Authority (FCA) also fast-tracked new measures that forced banks and lenders to freeze loan, car finance and credit card payments, where requested, for up to three months to help those individuals whose finances were affected by the Coronavirus outbreak. 

This has also now been extended for a further six months alongside the extension offered to mortgage holders. 

Although payments will be frozen on any outstanding loans or mortgages, any borrowings will continue to accrue interest at the regular rate, which will mean that debts continue to grow in size.
Whilst taking a holiday won’t affect a person’s credit score or file, as outlined above, it could still affect their ability to acquire additional credit in future according to some reports. 

It is recommended that you speak with your lender to ensure you can make use of these facilities. However, the FCA has said that borrowers who can afford to do so, should continue making repayments.

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