Lenders have offered more than 1.6 million mortgage payment holidays as of Friday 24 April 2020 to support customers facing financial difficulties due to coronavirus, new UK Finance figures have revealed.

The latest total means one in seven mortgages are now covered by payment holidays, following the steps taken by lenders to help households whose finances have been affected by the Covid-19 pandemic.

For the average mortgage holder, UK Finance also revealed the payment holiday amounts to £755 per month of suspended payments.

More than 1.2 million mortgage payment holidays were approved in the first three weeks of the scheme announced by Chancellor, Rishi Sunak, in March. UK Finance suggested a third of all payment holidays approved so far were done so between 25 March and 1 April, as lenders worked with customers quickly after Sunak’s announcement.

UK Finance CEO, Stephen Jones, 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.”

UK Finance also suggested lenders are continuing to offer product transfers, enabling existing customers who come to the end of a fixed term product, and meet eligibility criteria, to move to a new deal.

Further to the industry agreement announced in July 2018, the trade association highlighted the industry was also announcing additional help for homeowners on payment holidays or for those who have been furloughed.

Under normal circumstances, customers on payment holidays would not qualify for a product transfer, but given what UK Finance described as “the current exceptional circumstances”, lenders are waiving the rule to help borrowers impacted by coronavirus.

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.

Building Societies Association (BSA) chief executive, Robin Fieth, 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.”

Intermediary Mortgage Lenders Association (IMLA) executive director, Kate Davies, 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.”

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