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Press comment: Chancellor announces emergency three month mortgage holiday

10 March 2020

If you are covering the announcement by Chancellor Rishi Sunak that borrowers impacted by the coronavirus will get a three month mortgage payment break, please see the following comment from Charlotte Nixon, proposition director at Quilter Financial Planning:

"Many lenders such as Lloyds Banking Group and NatWest have said publically that they are putting in measures to protect their mortgage customers in light of the biggest health crisis this nation has faced in a century. However, today’s extra assurances from Chancellor Rishi Sunak that lenders will offer a three month mortgage holiday will do a lot to quell the nerves of all those currently worried about their mortgage.

"At this uncertain time three months may not be enough for some people but Sunak did mention that this was just the next step of the government’s measures so borrowers may still be set to get more if the crisis is prolonged further.

"Most borrowers will choose not to take the holiday if they are able to avoid it, as delaying also extends the borrowing period, which isn’t normally a good idea unless it is really essential. This new option should only be used by those who simply can’t meet repayments because of the crisis and need the breathing space to stabilise their finances.

"This news comes after The Bank of England already put forward a rate cut to reduce the base rate to just 0.25%. For homeowners, this is likely to mean that the low interest borrowing available at the moment will probably continue to be on offer for some time to come.

"The tighter affordability rules in place today should ensure that fewer people find themselves in a position where they struggle to keep up on their mortgage repayments, however the Chancellor’s new mortgage holiday will be a relief to those worried as the crisis evolved."

Alex Berry

Alex Berry

External Communications Executive

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