The £820m cost of mortgage holidays

The mortgage breaks taken by 1.6m homeowners due to the COVID-19 pandemic could cost them at least £821m in extra interest. Figures calculated by the broker L&C Mortgages, based on data from UK Finance, show that a borrower on the typical deal will save £2,256 in repayments by taking a three-month mortgage payment holiday. However, they will ultimately pay £500 more than they would have done without the break because of the interest accrued on the unpaid sum. Meanwhile, the Telegraph reports that homeowners who want to take up their lender's offer of a "mortgage holiday" during the pandemic are still being asked to pay because banks are struggling to approve the payment holidays quickly enough. And those who miss a mortgage payment because a break has not yet been confirmed could be marked as going into arrears. This could affect their credit score and result in extra interest being charged.

The Times (15/05.2020)   The Daily Telegraph (15/05.2020)