Lenders report a surge in mortgage repayment holiday requests

Since the Government announced on the 17th March 2020 that anyone struggling as a result of the Coronavirus pandemic will be able to take a three month mortgage repayment holiday, more than 1.2 million homeowners have taken advantage of the scheme.

What is a mortgage repayment holiday?

A mortgage repayment holiday is a request made to your lender to suspend mortgage payments for up to three months. Mortgage repayment holidays are available to all homeowners who are up to date on their mortgage repayments.

What about buy-to-let landlords, can they apply for a mortgage repayment holiday?

Yes, if a landlord's tenant has been financially affected by the Coronavirus pandemic then the landlord will be able to request a repayment holiday and the relief provided should be passed on to the tenant.

Is there an affordability test?

No, you do not need to undergo any affordability tests instead, your lender will ask you to self-certify that you have been affected, either directly or indirectly, by Coronavirus. If you are a landlord, you will be required to self-certify that your tenant's income has been affected.

What about my credit score, will this be affected if I take a repayment holiday?

No, the credit reference agencies which comprise of Experian, Equifax and TransUnion have all introduced an "emergency payment freeze" which means that credit scores are maintained at their current level for the duration of the repayment holiday.

For more practical information on common issued faced during the pandemic please visit our dedicated Coronavirus legal health check page https://www.legalhealthcheck.scot