Mortgage payment holidays could last 18 months to help ease financial pressure on Brits
STRUGGLING households may be allowed to extend mortgage holidays by a year to 18 months it's understood.
Chancellor Rishi Sunak announced in March that lenders had to offer three-month mortgage repayment holidays to coronavirus-struck households.
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As of April 28, 1.6million payment freezes has been granted, according to banking trade body UK Finance - accounting for around one in seven UK mortgages.
But reports that industry insiders are now considering extending mortgage holidays for some.
It's thought borrowers could be split into three groups; the first are those who can return to normal repayments after three months, the second have a good history of repayments but need the freeze extended in the short-term, and the third are those with no real prospects of repaying who may need debt advice.
The paper reports the measures are currently being looked at by regulator the Financial Conduct Authority (FCA) in a bid to prevent borrowers from defaulting and homes from being repossessed.
It follows the Bank of England warning that 1.5million jobs could be lost as the UK faces worst its worst ever recession.
One banker told The Times: “The last thing everyone wants is a repeat of the 1980s and 1990s, kicking families out onto the streets.”
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IF you're struggling financially, you might be able to cut the cost of your bills to help you get out of the red.
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Rent: If you have the space available and your landlord or local authority says it's ok to do so, you might want to consider getting a flatmate. Not only will you split the cost of the rent, but also the other bills.
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Gas and electricty: MoneySavingExpert says families can save £330 on average by switching from Standard Variable Tariffs (SVTs) to a better rate. Use a comparison site such as or to see what deals are available.
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Secured Loan: Your secured loan might be covered by the Consumer Credit Act and if it is, you may be able to apply for a Time Order. This is a special agreement by the courts allowing you more time to make payments. Secured loans not covered by the Consumer Credit Act include gas, electricity or water meters, payments that need to be written off in full, mortgages, credit union loans, loans from an employer and some short term trade agreements.
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TV licence: Some households are eligible for a reduced fee or free TV Licence. Pensioners over the age of 75 currently get a free TV licence, although this is due to change later in 2020. to see if you are entitled to a reduced or free rate.
But experts are said to be concerned about extending repayment holidays as while repayments are frozen, interest still accrues in the meantime, which means repayments will rise once the freeze ends.
UK Finance says a three-month payment holiday will add just over £9 a month onto the cost of the average £132,128 mortgage.
Both the trade body and the FCA told The Sun they're are looking at options for those who may need further support once their three-month mortgage holiday has expired, but they wouldn't go into further detail on what's being discussed.
Other measures are thought to include switching repayment mortgages to interest-only, so borrowers only repay the interest and not the capital for a year, and allowing borrowers to make 50 per cent of repayments for a year.
A FCA spokesperson said: "We are currently working with firms, consumer and debt advice groups, and government, to consider what other forms of support may be needed when the payment freezes come to an end.
"But we have not yet made any final decisions. We will confirm our plans in the coming weeks.”
A UK Finance spokesperson added: “UK Finance is working with the government and regulators to find the best solutions for all as the crisis continues.
More on mortgages
"All providers are ready and able to offer support to their customers who are impacted directly or indirectly by Covid-19.”
You can use MoneySuperMarket's mortgage holiday calculator to work out how deferring payments will affect you.
And here's how to apply for a mortgage holiday if you're struggling.