Lenders can offer a payment holiday of up to three months without the need to assess borrower circumstances, and applications can be made on a self-certification basis.
However, the trade bodies emphasise that landlords should pass on the relief to their tenants during this period.
However, lenders may extend their flexibilities in different directions or under varying means.
UK Finance and the BSA have set out the underlying principles of how the schemes will operate for owner occupiers and landlords, but they urge contacting the relevant lender as soon as possible.
With a payment holiday, borrowers will not have to make any monthly mortgage payments for a set amount of time, in this case up to three months.
However, it is important to remember that the money is still owed, and the interest on the mortgage still accrues during a payment holiday.
At the end of the payment holiday, the lender will be in contact to assess circumstances and agree a manageable way to repay the interest charges incurred and make up the deferred payments. Each lender will have a range of options to do this.
To be eligible for a payment holiday, borrowers will need to be up to date on mortgage payments.
For buy-to-let landlords, it will be available if tenants have lost income because of the impact of COVID-19.
There are a number of options available, and payment holidays are not always the most suitable solution for everyone. By speaking to the mortgage provider, they can tailor the best option.
If borrowers are concerned about making mortgage payments, they should contact the mortgage provider as soon as possible. Documentation is not required; borrowers will just need to self-certify that their income has been either directly or indirectly impacted by COVID-19.
Buy-to-let landlords will need to self-certify that their tenant’s income has been impacted by COVID-19. Landlords are expected to pass on this relief to their tenants to ensure that they are supported during this time.
Firms are doing their best to support their customers during these unprecedented times.
However, the spread of COVID-19 is also having an impact on their own staff. Applications will be dealt with as quickly as possible.
Mortgage providers will make every effort to ensure that borrowers taking a payment holiday will not be negatively impacted on their credit score.
Lenders will make every effort to support people already in financial difficulty, and will make this process as simple as possible.
Mortgage providers have agreed to a three-month moratorium on residential and buy-to-let possession action. No homes will be repossessed at this difficult time.
Tenants should contact their landlord or managing agent if they have problems paying rent.
For landlords whose tenants are unable to pay their rent, they should contact the lender as soon as possible to discuss the options that may be open.
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