Lenders grant 1.9 million deferrals to mortgage holders in three months

• 1.9 million mortgage payment deferrals have been offered to customers impacted by Covid-19 in the three months since the support was launched
• One in six mortgages in the UK are now subject to a payment deferral
• As borrowers near the end of their payment deferral, lenders will continue to provide support to customers facing financial hardship

As part of the industry’s plan to help its customers through the Covid-19 pandemic, 1.9 million mortgage payment deferrals, also known as payment holidays, have been granted to struggling homeowners, three months since the launch of the scheme. 

One in six mortgages are now subject to a payment deferral and for the average mortgage holder, the payment deferral amounts to £755 per month of suspended payments. This support has been widely appreciated by customers who were quick to take up the help on offer - 1.2 million deferrals were approved during the first three weeks of the scheme.  

Many homeowners will soon be coming to the end of the deferral period and lenders are now focused on helping customers to consider their next steps. They will contact borrowers before the end of their deferral period with a range of options to ensure they are supported through the coming months, whatever their financial situation. Borrowers who can afford to resume payments should do so, as it will always be in their best interests in the long run. However, for those who can’t, then help is at hand. Where possible, borrowers will be able to explore their options online.

The range of ongoing support available includes a further full or partial payment deferral, a move to interest only payments for a period, or extending the term of the mortgage to reduce payments, depending on the borrower’s circumstances.

Customers who have not yet applied for a payment deferral and are experiencing financial difficulties and those requiring further support after an initial payment deferral can still apply until 31 October 2020.

Commenting, Eric Leenders, UK Finance Managing Director, Personal Finance, said:

"Lenders understand that many households will continue to see their finances squeezed as the pandemic continues, and we are working hard to ensure everyone gets the support suited to their needs.

"The industry has a clear plan to help homeowners get through these tough times, and whilst it is best for customers to restart their payments if they can, where this is not possible lenders are keen to help, whatever a customer's financial situation."

Ends

Notes to Editor

1. UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms across the industry, we act to enhance competitiveness, support customers and facilitate innovation.

2. The banking and finance industry has put in place a  clear plan to help Britain through:

•  1.9 million mortgage payment deferrals
•  Offered 27 million interest-free overdrafts, provided 961,700 payment deferrals on credit cards and 688,900 payment deferrals on personal loans
•  £38 billion of lending to 910,000 businesses through  government Covid-19 lending schemes
•  Protecting customers from scams and fraud
•  Higher limit for contactless payments

3. Figures relate to the total first charge mortgage market, grossed up from a representative sample. The figures include both residential and buy-to-let mortgages, and may be subject to modest revision as firms identify double-counting and other anomalies in previous daily totals.   

4. There are currently 10,970,000 outstanding first charge mortgages in place in the UK, meaning the mortgage payment deferrals in place account for 17.3 per cent of total mortgages or slightly over one in six. The figures are until Thursday 11 June 2020.

5. More information on the measures introduced to support mortgage customers impacted by Covid-19 is available here. These measures include:

• A moratorium on residential and buy-to-let possession action, extended until 31 October, giving customers reassurance that they will not have their homes repossessed at this difficult time.
• Offering customers who have exchanged contracts for a house purchase the option to extend their mortgage offer for up to three months to enable them to move at a later date.