"The industry has acted quickly to support homeowners through this crisis"
Normally customers on payment holidays would not qualify for a product transfer, but lenders are agreeing to waive this rule to help borrowers impacted by Covid-19.
Product transfers are for like-for-like mortgages and tend not to require a new affordability assessment, meaning existing borrowers who have been furloughed will also be eligible.
UK Finance figures show that one in seven mortgages in the UK are now subject to a payment holiday, up from one in nine two weeks ago, according to the latest figures from UK Finance.
Over 1.6 million mortgage payment holidays have now been offered to homeowners impacted by Covid-19, with almost 700,000 payment holidays granted so far in April.
Stephen Jones, CEO of UK Finance, said: “Lenders understand that many households are seeing their finances squeezed due to the coronavirus pandemic and we are working hard to help customers get through these tough times.
“The industry has acted quickly to support homeowners through this crisis and has taken decisive steps to ensure that eligible customers on payment holidays due to Covid-19 can opt for the security of fixing their monthly mortgage payments going forward.
“There is a range of support available to mortgage holders concerned about their finances. We would encourage any homeowners impacted by coronavirus to visit their lender’s website in the first instance to find out more information and how to apply.”
Robin Fieth, chief executive of the Building Societies Association, commented: “The Covid-19 situation means that right now times are far from normal and many households are worried about their finances. Lenders are working hard to help in a range of ways and it is right that this now includes the ability for those on a three-month payment holiday to be able to switch onto a new product with their existing lender at the end of a fixed term product should the two events coincide.”
Kate Davies, executive director of IMLA, added: “This agreement builds on the commitment made by lenders in July 2018 to contact customers who are coming to the end of a mortgage deal and discuss what alternative options might be available.
“It offers additional – and no doubt welcome – reassurance that customers will not be penalised if they have sought an approved payment holiday during this difficult period.”
