Lenders have granted 1.6m mortgage payment holidays to homeowners facing financial difficulties due to the coronavirus outbreak.
Chancellor Rishi Sunak announced in March that households with mortgages would be entitled to three-month payment holidays. Over a third of payment holidays approved so far were done in the first week of the UK’s lockdown.
One in seven mortgages are now subject to a payment holidays, according to new data released by UK Finance. For the average mortgage holder it amounts to £755 per month of suspended payments.
Chief executive of UK Finance, Stephen Jones, said: “The industry has acted quickly to support homeowners through this crisis and has taken decisive steps to ensure that eligible customers on payment holidays due to Covid-19 can opt for the security of fixing their monthly mortgage payments going forward.
“There is a range of support available to mortgage holders concerned about their finances.”
Lenders are still offering product transfers to allow existing customers who come to the end of a fixed term product, and meet eligibility criteria, to move to a new deal.
Additionally, the industry has announced extra help for homeowners on payment holidays or for those who have been furloughed.
It builds on the commitment made by lenders in 2018 to contact customers who are coming to the end of a mortgage deal and discuss what other options might be available.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said: “[The agreement] offers additional – and no doubt welcome – reassurance that customers will not be penalised if they have sought an approved payment holiday during this difficult period.”