The Mortgage Market Alliance (MMA) has warned that borrowers shouldn’t just have to “accept” a product transfer if they have taken out a mortgage payment holiday from their lender.
The message came after UK Finance announced yesterday that customers coming to the end of their mortgage deal will be able to access product transfers with their existing lender – even if they are taking a mortgage payment holiday.
UK Finance suggested that customers on payment holidays would normally not qualify for a product transfer, but that given the ongoing coronavirus crisis, lenders would be “waiving” this rule to help borrowers impacted by Covid-19. The trade association added that 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 for a transfer.
However, the MMA has urged any borrowers who have been offered a product transfer rate by their existing lender, to take the information to a mortgage adviser.
MMA director, Rob Griffiths, commented: “For all those borrowers who are currently taking mortgage payment holidays, it is obviously good news that lenders will continue to offer them product transfers if this period also coincides with them coming to the end of their special rate.
“However, it’s important for borrowers not to think this is the only option available to them or that they have to accept the product transfer simply because they have taken a mortgage payment holiday.
“That is not the case – they are under no obligation to do so and can, if they wish, remortgage to another lender if this is a more appropriate option. To that end, we would urge any borrower coming to the end of their deal, and having been offered a product transfer rate by their existing lender, to take that information to their mortgage adviser who will be able to weigh up their current needs and circumstances and review the entire mortgage market, before providing their mortgage recommendation.
“Given the Covid-19 situation and the impact on borrowers, plus the fact that the mortgage market is changing rapidly with lenders returning to product sectors daily, the best option for borrowers is to use the services of a mortgage adviser to ensure that they can secure the best option for themselves both now and in the future.”
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