Banks offer mortgage repayment holidays due to coronavirus

High street lenders RBS, NatWest, TSB, Virgin Money and Santander will allow those affected by coronavirus mortgage repayment holidays.

RBS and NatWest will allow customers affected by coronavirus to defer payments by up to three months, with TSB offering a repayment holiday of two months.

There is some ambiguity as to how customers have to be ‘affected’ by the virus to benefit from these special measures – payment holidays are being considered on a case-by-case basis.

A spokesperson from RBS and NatWest, said:

“We are monitoring the potential impact of coronavirus across all our customers to ensure we can support them appropriately through any period of disruption.

“We understand that there may be circumstances where a personal customer may fall into financial difficulty as a result of the impacts of coronavirus, for instance, loss of income.

“We will look to understand each customer’s situation on a case-by-case basis and can offer a number of options to help them manage their finances. We would encourage any customer experiencing financial difficulty to get in touch with us.”

Virgin Money will also consider offering relief on a case-by-case basis.

Meanwhile Santander is offering support to customers, which can include deferring or reducing repayments.

A Santander spokeswoman said:

“Santander has a team of experts on hand to support customers who have been impacted by the coronavirus. Anyone who has been affected can talk to us on 0800 9 123 123.”

In other measures, Lloyds Banking Group is offering £2bn of new funding to small firms with no fees.

Meanwhile Barclays is contacting business customers affected by the virus, offering them 12-month capital repayment holidays on loans of more than £25,000.

Barclays said in a statement:

“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.

“These customers can also access their fixed savings accounts early without paying any penalty charges.”

Miles Robinson, head of mortgages at online mortgage broker Trussle, said:

“Mortgage lenders don’t live under a rock. They know that coronavirus is causing severe uncertainty.

“They’re also aware that as a result of the outbreak, some customers might be unable to make their monthly mortgage repayments. Following Italy’s nationwide lockdown to contain the spread of the virus, payments on mortgages are to be suspended across the country.

“In the UK, we’ve already seen a number of lenders offering customers payment holidays on their mortgages and other loans if coronavirus means they face difficulties paying because of loss of work.

“Borrowers who are worried about coronavirus and what it might mean for their mortgage should get in touch with their lender as soon as possible to discuss their options.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said:

“Lenders are reasonably sympathetic to any illness that affects a borrower’s ability to pay their mortgage, whether it’s coronavirus or something else.

“They may ask for evidence that you are unwell but the message to borrowers, particularly the self-employed who are most likely to be affected in terms of their income, is that anytime you are struggling to pay your mortgage, get in touch with your lender. Don’t bury your head in the sand and hope the problem will go away – it won’t.

“If you find yourself struggling, make a proposal to your lender – you might not be able to afford to pay all your mortgage, for example, but you could offer to pay half. The important thing is to ask for help as early as possible rather than ignoring the issue. While lenders should offer support to borrowers, they can only do that if they know there is a problem.

“Keep a note of any conversations or correspondence you have with the lender about a payment holiday, as if is not marked down correctly and is noted as arrears, there could be an issue when you come to remortgage in two or three years’ time. But if it is marked correctly, it shouldn’t harm your credit rating.

“Lenders aren’t under any obligation to give you a payment holiday and if you are a habitual late payer of your mortgage, they are less likely to be supportive. However, even if you are in this situation you should talk to your lender and see what can be done.”

Kindly shared by Property Wire