Banks and building societies have agreed to extend the mortgage payment holiday for a further three months.

Homeowners whose finances have been impacted by coronavirus can extend their mortgage payment holiday by a further three months.

Banks and building societies have agreed to extend the period during which customers do not need to make mortgage repayments beyond the initial three-month deadline.

Lenders will work with borrowers who are struggling to meet their repayments to find the best solution for them.

This includes extending the payment holiday, agreeing reduced payments, switching them to an interest-only mortgage and extending the mortgage term.

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They have also agreed not to proceed with involuntary repossessions for both residential and buy-to-let mortgage customers until October 31 2020.

The news comes as the mortgage trade body UK Finance said that 1.82 million mortgages (the equivalent of one in six home loans), are now covered by the payment holiday.

Stephen Jones, chief executive of UK Finance, said: 

“Mortgage lenders are committed to providing those borrowers nearing the end of their three-month payment holiday with help and flexibility in choosing the next steps which best suit their needs.”

How does a mortgage payment holiday work?

Customers whose finances have been impacted by coronavirus are allowed to take time off making mortgage repayments.

The original payment holiday was announced on 17 March and lasted for three months, but the term has now been extended by a further three months where appropriate.

But the mortgage payments are only deferred, and the interest that would have been paid is added to the outstanding debt owed.

The missed payments will need to be made up at some point in the future.

What other options are available?

Lenders have agreed to work with borrowers to find the best solution for them.

This may be a payment holiday, or they may look at other options that could better suit their circumstances.

For example, they may agree to accept reduced payments for a period of time, switch them to an interest-only mortgage, or extend their mortgage term. This would also lead to reduced monthly repayments.

But despite this flexibility, UK Finance has urged people who can afford to keep up with or resume their mortgage payments to do so.

How do I apply for a payment holiday?

If you want to apply for a mortgage holiday, go to your lender’s website and follow the link on coronavirus.

Many lenders have set up an online application process after being inundated with requests in the early days of the scheme.

If you want to take a different option, such as switching to an interest-only mortgage, you should contact your lender directly.


Use the mortgage payment holiday calculator below, powered by mortgageholiday.co.uk, to see how your monthly payments may be affected by a holiday, and to find out how to apply:


Whether you apply online or by telephone, you will need your mortgage details to hand, including your account number.

But you will not need to prove that your finances have been impacted, as lenders are allowing people to self-certify this.

Do not cancel your direct debit before the payment holiday has been agreed, as this would be classed as a missed payment and could impact your credit history. 

Can anyone apply for a payment holiday?

A payment holiday is only available if you are not in mortgage arrears and have suffered only a temporary drop in your income, rather than a long-term reduction in your earnings.

If you face longer-term financial issues, an alternative solution may be more appropriate for you.

Either way, contact your lender and discuss it with them.

The fact that lenders have agreed not to pursue repossessions until after 31 October means you have some breathing space to work out a solution.

Will it impact my credit score?

Getting into mortgage arrears would normally have a negative impact on your credit score. But in light of the current exceptional circumstances, UK Finance has said lenders will make sure that borrowers’ credit scores are not affected.

As a result, if you are struggling to meet repayments it is important that you get in touch with your lender and agree to a formal payment holiday.

Top three takeaways

  • Homeowners whose finances have been impacted by coronavirus can extend their mortgage payment holiday by a further three months.

  • Lenders will work with borrowers who are struggling to meet their repayments to find the best solution for them, including extending the payment holiday, agreeing reduced payments, switching them to an interest-only mortgage and extending the mortgage term.

  • They have also agreed not to proceed with involuntary repossessions for both residential and buy-to-let mortgage customers until 31 October 2020. 

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