Jump to content
House Price Crash Forum

One in nine mortgage holders in the UK has taken a payment holiday


Recommended Posts

One in nine mortgage holders in the UK has taken a so-called "payment holiday" as their finances have been hit by the effects of coronavirus.

Lenders have agreed that 1.2 million homeowners can delay repayments as jobs are cut and wages reduced.

Typically, this defers a mortgage bill of £775 a month, with borrowers given the option of delaying up to three months of repayments.

The number of deferrals in place more than tripled in the two weeks between 25 March and 8 April, growing from 392,130 to 1.24 million. This is an increase of nearly 850,000, or an average of around 61,000 payment holidays being granted by lenders per day.

Link to post
Share on other sites

Lottery win time again - take a 3 month mortgage 'holiday' even if you don't actually need it yet.

A lot of people seem to be doing this, and encouraging others to do so even when they are still fully employed - Yay free money. Surprised it's as low as 1 in 9 - expect that to be over 50% in the next few weeks.

It's a bit like borrowing money to pay for your borrowed money though.

Link to post
Share on other sites
Just now, Andy T said:

Surprised it's as low as 1 in 9 - expect that to be over 50% in the next few weeks.

This. Just 1 in 9?

Although it's basically a deferred default and after like 5% defaults the lender typically goes bust...

Link to post
Share on other sites
6 minutes ago, Andy T said:

Lottery win time again - take a 3 month mortgage 'holiday' even if you don't actually need it yet.

A lot of people seem to be doing this, and encouraging others to do so even when they are still fully employed - Yay free money. Surprised it's as low as 1 in 9 - expect that to be over 50% in the next few weeks.

It's a bit like borrowing money to pay for your borrowed money though.

You never know they might need it....doesn't mean they will spend it, defer the payments for 25 years.....or 50 years or forever.;)

Link to post
Share on other sites
7 minutes ago, Andy T said:

Lottery win time again - take a 3 month mortgage 'holiday' even if you don't actually need it yet.

A lot of people seem to be doing this, and encouraging others to do so even when they are still fully employed - Yay free money. Surprised it's as low as 1 in 9 - expect that to be over 50% in the next few weeks.

It's a bit like borrowing money to pay for your borrowed money though.

Only its not lottery win, it just means you pay it back later. If your term is long it won't be noticed. Those with short terms will notice this most. 

Link to post
Share on other sites
Just now, winkie said:

You never know they might need it....doesn't mean they will spend it, defer the payments for 25 years.....or 50 years or forever.;)

It's not deferred though - they charge interest on the interest, which increases monthly payments, and total amount paid.

A more sensible option would of been to allow temporary interest only payments - that way the bank is satisfied of their usual income, only the capital repayment is affected.

Link to post
Share on other sites
5 minutes ago, Andy T said:

It's not deferred though - they charge interest on the interest, which increases monthly payments, and total amount paid.

A more sensible option would of been to allow temporary interest only payments - that way the bank is satisfied of their usual income, only the capital repayment is affected.

Fair point.....but as we all know even the banks do not want to lose out from a crisis....we also know there are many that will take what is given to them today without a care what compounding over time it might cost them tomorrow.;)

Link to post
Share on other sites
7 minutes ago, The Preacherman said:

Only its not lottery win, it just means you pay it back later. If your term is long it won't be noticed. Those with short terms will notice this most. 

So many will see it as simply adding 3 extra months on the end of whatever term their mortgage is. Expect uproar when mortgage payments actually increase 3 months later, even if the increase is about £20 a month.

Link to post
Share on other sites
8 minutes ago, Andy T said:

So many will see it as simply adding 3 extra months on the end of whatever term their mortgage is. Expect uproar when mortgage payments actually increase 3 months later, even if the increase is about £20 a month.

This.

Link to post
Share on other sites
8 minutes ago, Andy T said:

So many will see it as simply adding 3 extra months on the end of whatever term their mortgage is. Expect uproar when mortgage payments actually increase 3 months later, even if the increase is about £20 a month.

Will they be forced into increases in repayments immediately?

When I've made an overpayment to my mortgage ive typically received a letter asking if i want my repayments to change or the term to change as a result of the overpayment. Don't mortgage holidays work the same way? 

Link to post
Share on other sites
2 minutes ago, regprentice said:

Will they be forced into increases in repayments immediately?

When I've made an overpayment to my mortgage ive typically received a letter asking if i want my repayments to change or the term to change as a result of the overpayment. Don't mortgage holidays work the same way? 

99% sure yes.

I remember friends with Northern Rock mortgages back in 2005, they pushed payment holidays then as a way of buying a sofa/tv etc - I think you could take 1 month off a year?

Anyway, after a month's payment holiday, the repayment amount automatically increased the next month, without any warning or explanation. 

Link to post
Share on other sites
43 minutes ago, Andy T said:

It's not deferred though - they charge interest on the interest, which increases monthly payments, and total amount paid.

A more sensible option would of been to allow temporary interest only payments - that way the bank is satisfied of their usual income, only the capital repayment is affected.

I know people that have claimed a 'refund' on student loan overpayments, which was then immediately added to their outstanding loan ?

This is a GREAT DEAL.

Link to post
Share on other sites

This is no holiday really, just a deference and shows how on the edge so many people are with their mortgages and debts. I really don't think it's clear in some peoples heads yet what kind of world we could be returning to, where wages in new jobs become far more competitive and where self employed and businesses are competing harder with each other to lower prices. And absolutely nobody is going to take your financial circumstances into consideration when dealing with their own money. 

I have been waiting several years for this time, though I wish it had not been something as tragic as an epidemic. I have lived in a zero debt world, no buying dross and be prepared to be able to pay your living costs if you were forced to take a 50% wage cut, and that's where I am right now. When all this is over I will be in a position where I will be able to bargain hard and boy I will be doing just that, these people on mortgages holidays/deference will have to start paying what they were paying before in what was a much easier world, and  that was bad enough for them,  into a world that is going to be much tougher.

I am particularly looking forward to my future landlord/s conversation where I will be telling them what I am going to pay them for rent for the property they cannot rent out and they will then inform me "do you know what my mortgage costs are" and my reply will be I don't give a f***. For too long now landlords for example think they borrow money for a property and it is just a God given right that they the add their cut and make profit, no other business has that attitude. I have never informed a customer, not that I have to, that he/she must pay this because I have a loan on my business, they just want you beat the quote from the last guy, end of.

 

Link to post
Share on other sites

Article in the Guardian yesterday suggesting that banks are going to hold taking a deferral against you when the time comes to remortgage. I thought about it, and decided against it for this reason even before reading this article, which actually claims that at least one lender has indicated that any future remortgage request from someone who has deferred will be an automatic refusal. The only claim they are giving is that a deferral won't affect your credit record - this is just one bit of data that lenders look at when deciding a loan, and there is nothing to stop them asking whether or not you took a deferral, or indeed from confirming such by looking at your historical bank records. Tread with caution - it could end up costing you a lot of money if you get stuck on an SVR, and it will never end up saving you any money - it will just help with short term cash flow issues.

Quote

Chris Sykes, a consultant at the firm, added that, by requesting a payment holiday, “essentially you are announcing to your lender – and, potentially, other lenders who might see your bank statements in the future – that you are in financial difficulty. One lender has even told us that if a borrower has requested a payment holiday on an existing loan, any new cases will automatically be declined. Be warned that they won’t be alone.”

 

Edited by mattyboy1973
Link to post
Share on other sites
47 minutes ago, crumblingcon said:

This is no holiday really, just a deference and shows how on the edge so many people are with their mortgages and debts. I really don't think it's clear in some peoples heads yet what kind of world we could be returning to, where wages in new jobs become far more competitive and where self employed and businesses are competing harder with each other to lower prices. And absolutely nobody is going to take your financial circumstances into consideration when dealing with their own money. 

I have been waiting several years for this time, though I wish it had not been something as tragic as an epidemic. I have lived in a zero debt world, no buying dross and be prepared to be able to pay your living costs if you were forced to take a 50% wage cut, and that's where I am right now. When all this is over I will be in a position where I will be able to bargain hard and boy I will be doing just that, these people on mortgages holidays/deference will have to start paying what they were paying before in what was a much easier world, and  that was bad enough for them,  into a world that is going to be much tougher.

I am particularly looking forward to my future landlord/s conversation where I will be telling them what I am going to pay them for rent for the property they cannot rent out and they will then inform me "do you know what my mortgage costs are" and my reply will be I don't give a f***. For too long now landlords for example think they borrow money for a property and it is just a God given right that they the add their cut and make profit, no other business has that attitude. I have never informed a customer, not that I have to, that he/she must pay this because I have a loan on my business, they just want you beat the quote from the last guy, end of.

 

I do hope you're right.. I own my own place but as common knowledge on here that's contrary to everyday belief.. If mine drops the step up drops by more.. The nice shiny cars people have on finance.. Be prepared to be forced to sell your assets and have the actual prudent folk pick them up at massive discounts.. No one gives a sh*t you made some bad decisions.. Make better choices end of.. The Highway man is about to be redefined if you are correct.. I hope you are. Provided we don't all lose our jobs lol..

Link to post
Share on other sites
41 minutes ago, mattyboy1973 said:

Article in the Guardian yesterday suggesting that banks are going to hold taking a deferral against you when the time comes to remortgage. I thought about it, and decided against it for this reason even before reading this article, which actually claims that at least one lender has indicated that any future remortgage request from someone who has deferred will be an automatic refusal. The only claim they are giving is that a deferral won't affect your credit record - this is just one bit of data that lenders look at when deciding a loan, and there is nothing to stop them asking whether or not you took a deferral, or indeed from confirming such by looking at your historical bank records. Tread with caution - it could end up costing you a lot of money if you get stuck on an SVR, and it will never end up saving you any money - it will just help with short term cash flow issues.

 

Very good point - illustrates why this facility should only be used when it becomes absolutely necessary. Possibly better to explore other options such as overdrafts.

Link to post
Share on other sites
3 minutes ago, Andy T said:

Very good point - illustrates why this facility should only be used when it becomes absolutely necessary. Possibly better to explore other options such as overdrafts.

The bottom line is: Never, ever trust the banks. I suspected that it would count against you, either officially or unofficially, going forwards, but I was surprised to see it laid out so clearly in the Guardian article. The idea that won't affect your "credit rating" is a bit of smoke and mirrors, since your credit rating is not the only thing that affects your chances of getting a decent mortgage. The fact that they didn't say "won't have an impact on future mortgage applications" is telling.

Link to post
Share on other sites
15 minutes ago, mattyboy1973 said:

The bottom line is: Never, ever trust the banks. I suspected that it would count against you, either officially or unofficially, going forwards, but I was surprised to see it laid out so clearly in the Guardian article. The idea that won't affect your "credit rating" is a bit of smoke and mirrors, since your credit rating is not the only thing that affects your chances of getting a decent mortgage. The fact that they didn't say "won't have an impact on future mortgage applications" is telling.

You can almost hear the echoes of '..but ...but I was misled....give me my compo now!'

Link to post
Share on other sites
2 hours ago, msi said:

You can almost hear the echoes of '..but ...but I was misled....give me my compo now!'

The next PPI ;)

I guess with the upcoming negative equity and possible forced sellers, the banks will have a lot more to worry about than the remortgage issues of people who have taken the 'holiday'.

Link to post
Share on other sites
1 hour ago, ucnvpe0 said:

The next PPI ;)

I guess with the upcoming negative equity and possible forced sellers, the banks will have a lot more to worry about than the remortgage issues of people who have taken the 'holiday'.

Mortgage holiday mis-selling  car finance mis-selling, Help to Buy mis-selling, they will have a nice suite of injustices to issue helicopter money against.

Link to post
Share on other sites

Was on a zoom chat with a few friends last night (all in our 30s). Two couples proudly announced they'd already had their mortgage holidays sorted. One of which, no kids, and only one of them furloughed. Should be still be getting the majority of their normal income and they've done that! I think people really have seen it as free money, and if that guardian article is correct, have totally ******ed themselves for no reason

Link to post
Share on other sites
1 hour ago, cbathpc said:

Was on a zoom chat with a few friends last night (all in our 30s). Two couples proudly announced they'd already had their mortgage holidays sorted. One of which, no kids, and only one of them furloughed. Should be still be getting the majority of their normal income and they've done that! I think people really have seen it as free money, and if that guardian article is correct, have totally ******ed themselves for no reason

Either of them so over-mortgaged that their plan is to be paying for the rest of their lives anyway?

Link to post
Share on other sites

Another aspect of mortgage holidays and the low end workers on £2500 monthly or less and following isolation/lockdown are  from what I am seeing loving it, at least some of them, not because they are getting any benefits or they are glad football, going down the local or having a fast food cheesburger are all off the menu, so many people are suffering burnout in recent years and finally putting their feet up and doing f*** all is paradise

I suspect a lot of people will be coming out of this in the future and re-evaluating their lives, nothing beats being time rich if you know what to do with that time

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 417 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.