Covid 19 Information: Mortgage Payment Holiday FAQs

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Daniel Guy 27 November, 2020

Does Hodge offer payment holidays?

Yes, in line with UK Finance guidance we’ll continue to offer payment holidays of up to three months for customers who are unable to make mortgage payments during these unprecedented times. This will be reviewed on a case-by-case basis and your BDM will be able to provide you with more tailored information. All payment holidays must end by 31 July 2021.

Does a payment holiday have to be three months?

No, your customer can request a payment holiday of up to 6 months in total but we can only agree a payment holiday of up to 3 months at a time. We may be able to renew your customers’ payment holiday after the first 3 months, as long as this doesn’t take them over the 6 month limit.

Will the payment holiday affect my customer’s credit score?

If a payment holiday is agreed, the Credit Reference Agency will be notified the customer has an arrangement in force. The mortgage won‘t be classed as in arrears as it’s been agreed between the lender and the customer. We’ll  ensure that if your customer takes a payment holiday it won’t negatively impact their credit score. If they experience any issues around this please get in touch so we can help.

How will the payment holiday affect my customer’s mortgage?

At the end of the payment holiday the amount deferred can be repaid either:

  • By making a single payment for the full amount
  • By making an arrangement to repay the deferred amount over an agreed period of time, in addition to resuming normal monthly repayments
  • By recalculating the monthly mortgage payments at the end of the payment holiday which means payments may increase.

It’s important to remember that even though your customer may miss payments due to the payment holiday, by recalculating the monthly payments the amount owed will go up. That’s because we’ll  still add interest to the mortgage while they take a break.

Who’s eligible for a payment holiday?

If your customer has been affected by Covid-19 they’ll  automatically be eligible for a payment holiday. They’ll need to be up to date with their mortgage payments and have consent from everyone on the mortgage. If they aren’t up to date on their mortgage payments, please contact us to discuss their options.

If your customer is newly affected by Covid-19 and they want to benefit from the full 6 months available, they should apply plenty of time before their February 2021 payment is due. Their payment holiday will then run from February to April at which point they can contact us to ask for a further three months, taking them up to July.  

  • If they’ve already taken payment holidays of less than 6 months, they have until 31 March 2021 to apply for another payment holiday.

After 31 March 2021 they can extend an existing payment holiday up until 31 July 2021, as long as:

  • It doesn’t go over the 6-month payment holiday limit
  • There aren’t any breaks in the support

They won’t be eligible to apply if they’ve already had payment holidays of 6 months in total. Instead, they can ask us for tailored support.

Is a mortgage payment holiday the right option?

It’s important to remember a payment holiday is a temporary break from mortgage payments to help those customers affected by Covid-19. There are a few things to consider before applying for a mortgage payment holiday, to make sure it’s right for their situation:

  • When the payments start again, they’ll be recalculated, and they may see an increase in the monthly payments
  • The total amount of interest they pay over the term of their mortgage will increase.

What happens if my client is already in arrears?

Anyone concerned about the impact Covid-19 will have on their income should contact us as soon as possible. We’ll make every effort to support people already in financial difficulty and will make this process as simple as possible.

We hope this answers any questions or concerns you may have, if you have any questions please get in touch.