- Many banks are offering to help customers who are struggling with the impacts of the Coronavirus
- A number of the big banks are permitting payment holidays for mortgages and loans
- Other support includes increasing credit card limits and waiving early closure fees for savings accounts
- Chancellor of the Exchequer, Rishi Sunak, announces a three month mortgage holiday and £330bn of government-backed loans
The Covid-19 outbreak has left some UK workers unable to make mortgage or loan payments on time. After Italy declared a suspension on all mortgage payments, many British customers are looking for relief measures. Fortunately, a number of banks have enforced emergency support systems that could help if you find yourself in financial trouble. (More Coronavirus / COVID19 news and information)
Mortgage Holiday Announced by Chancellor
The Chancellor of the Exchequer, Rishi Sunak announced on Tuesday at the Prime Minister’s daily Coronavirus briefing, that for those that require, there will be a three month mortgage holiday available to help ease the burden of debt on homeowners. Further reassuring for homeowners, borrowers, businesses and lenders, and taking things further than in the Budget, Rishi Sunak said that it is “a time to be bold, a time for courage” and that “the government will give you all the tools you need to get through this.”
This mortgage holiday measure will also help to increase confidence in the market and amongst lenders. With many lenders currently holding back from lending and providing the often much-needed funding, having the most important asset, one’s home more secure will be seen as a welcome move from the government for homeowners as well as many lenders. This is likely to be a positive move for both the secured loans market as well as the often forgotten bad credit loans market.
Rishi Sunak announced:
- A package of £330bn worth of loan guarantees for businesses affected by COVID19
- Interest-free business interruption loans to be further increased to £5m
- 12-month business rates holiday for all shops, pubs, theatres, music venues and restaurants as well as businesses across the entertainment and leisure sectors affected by Coronavirus
- Cash grants of as much as £25,000 for businesses with rateable values of less than £51,000
- A three-month mortgage holiday for homeowners facing difficulties due to coronavirus
Does My Bank Offer Support?
Lloyds Bank, Halifax, Bank of Scotland and MBNA are among the banking groups offering payment holidays for mortgages and loans. These banks are also removing all fees for missed payments on credit cards, loans and mortgages for the time being. Additional support offered to their clients includes emergency access to fixed-term savings and increased deposit limits in online banking to help people who cannot access a branch.
Royal Bank of Scotland (RBS) and Natwest have put in place temporary measures to help those struggling. All banks under the RBS group are offering mortgage and loan repayment deferral for up to three months. They are also offering customers the option to close fixed savings accounts with no early closure charge, as well as increased temporary credit card limit and refunds on credit card advance fees.
Barclays has not offered a mortgage holiday but stated that “any customers suffering hardship as a result of COVID-19 can contact our specialist support colleagues if they are experiencing problems making repayments to their mortgage, overdraft, personal loans or credit cards”. The bank has removed penalty charges for early access fixed savings accounts early and is also supporting applications for temporary credit card limit increases.
HSBC and First Direct are offering mortgage extensions or allowing customers to switch their rate. They are also providing early access to fixed-rate savings accounts without closure charges and are supporting applications for an increase in credit card and overdraft limits.
TSB has stated that mortgage customers can apply for a repayment holiday of up to two months. They have also waived early closure fees on TSB’s Fixed Rate ISAs and are supporting emergency credit limit increases. Virgin Money, Clydesdale Bank and Yorkshire Bank are offering payment holidays and debt restructuring for some customers affected by the Coronavirus as well as temporary increases in credit limits.
Santander has said that there is support available for customers, including possibilities to defer or reduce due payments. While the bank has not explicitly outlined its special measures, Santander has stated that there is a team of experts on hand to support customers who have been impacted by the Coronavirus. The bank will treat each customer’s situation individually based on their specific circumstances. Co-operative Bank and Metro Bank also say that they will approach support based on individual circumstances and encourage customers to get in touch if they are in trouble.
The Post Office, alongside their mortgage provider The Bank of Ireland, has offered customers who have been financially impacted by Coronavirus repayment relief or flexible arrangements on mortgages or loans.
Find out how to apply for a coronavirus mortgage holiday.
What Other Support is Available?
For advice on how to deal with the financial impacts of the Coronavirus contact StepChange. The debt advisory organisation offers free online debt advice and specialist information relating directly to the effects of the Covid-19. Visit the website for more information: https://www.stepchange.org/debt-info/debt-and-coronavirus.aspx
Citizens Advice is also a great support system with more than 21,000 advisers. Go to citizensadvice.org.uk.
If you are having trouble meeting your mortgage payment, contact your bank immediately.
