Mortgage Payment Holidays During Coronavirus: Key Facts for Borrowers
The financial impact of Covid-19 has been felt across the UK and internationally. To ease the strain on property owners, the UK government introduced a three-month support measure: mortgage payment holidays during coronavirus. This policy applied to both homeowners and buy to let landlords, offering breathing space in uncertain times. But how does it work, and what do borrowers need to consider before applying? At Articus Finance, we provide clarity on this important subject.
Are All Lenders Offering Mortgage Payment Holidays?
The approach varied across different lenders. While high street banks generally confirmed support quickly, specialist lenders and private banks took longer to formalise policies. Most, however, implemented the three-month scheme in line with the guidance from the Financial Conduct Authority (FCA). Where lenders did not issue clear statements immediately, our brokers were on hand to advise affected clients on available alternatives.
Who Can Apply for Mortgage Payment Holidays During Coronavirus?
Eligibility for mortgage payment holidays during coronavirus was deliberately broad to provide effective relief. Borrowers experiencing financial or health-related disruption could qualify — whether through illness, furlough, reduced salary, or business interruption for self-employed individuals. There was no requirement to prove illness or pass affordability tests. Instead, borrowers could self-certify that they had been impacted.
For landlords, the principle was clear: relief obtained through mortgage holidays should be passed on to tenants affected by the crisis. Where tenants continued to pay rent in full, landlords were advised not to claim unnecessarily.
Fees and Repercussions
The FCA confirmed that lenders should not charge additional fees for granting these holidays, nor should borrowers’ credit scores be negatively affected. However, it was important for clients to understand that this was not an opportunity to erase debt. Borrowers remained responsible for the same total capital, and interest continued to accrue on outstanding balances.
In practice, this meant that while short-term repayments were reduced to zero, the overall mortgage balance would be marginally higher once repayments resumed. Clients were therefore encouraged to weigh short-term cash flow relief against long-term financial outcomes.
Alternatives to Mortgage Payment Holidays
For many high net worth (HNW) individuals — particularly those borrowing via private banks or specialist lenders — a more tailored solution proved advantageous. Options included:
- Switching temporarily to interest-only mortgages to reduce monthly outgoings.
- Deferring interest payments by agreement, maintaining core liquidity.
- Extending the mortgage term to lower repayments without interrupting the facility.
- Exploring refinancing options via remortgage services to lock in lower long-term rates.
These strategies avoided some of the downsides of taking formal mortgage payment holidays during coronavirus, while still providing important relief.
Why Specialist Advice Matters
The pandemic illustrated the value of clear advice and strong lender relationships. While mainstream lenders provided broad-based measures, private banks and niche institutions considered cases individually, ensuring agreements matched client requirements. Articus Finance’s role was to broker these arrangements discreetly, ensuring outcomes aligned with clients’ wider wealth strategies.
Whether protecting liquidity, minimising costs, or restructuring borrowing, we ensured clients received timely, appropriate solutions tailored to their individual profiles.
Final Thoughts on Mortgage Payment Holidays During Coronavirus
Mortgage payment holidays during coronavirus served as a critical lifeline for many borrowers. While broadly accessible, they were not without consequences, and for HNW clients with significant wealth structures, bespoke alternatives often provided greater long-term value. Careful consideration and expert advice were essential to making the right decision.
At Articus Finance, we continue to advise clients through complex borrowing environments, ensuring discretion, efficiency, and lender access even during periods of global uncertainty. For further tailored guidance, Contact Us or consult official FCA resources for regulatory context.
