The route to paying off your mortgage can be a long one, with mortgage payments often seeing households using a significant portion of their income, and as a result, having less money each month for the other important parts of daily life.

Many are struggling to keep up with this financial obligation, with mortgage payments taking a 14% drop compared to payments before the pandemic according to the Institute of Fiscal Studies (IFS).

According to the same research the average UK household earnings have also been hit during the pandemic with a 9% on earnings from April to May.

These times can be incredibly stressful for many families across the country, with perhaps, some of these stats mirroring the situations that you, or your loved ones, may currently be facing.

However, there are ways to keep on top of payments, and we’re here to help you navigate the potential options for your needs.

Why not look at when your initial fixed rate term is due to end? If you review your mortgage three to six months before the end of the initial deal, it could potentially save you money as you may be able to switch. Being loyal doesn’t necessarily mean that you will get the best deal.

Another potential option could be a product transfer. The eligibility for a product transfer can be checked through your existing lender, and could lead to you saving money that you could invest in other areas.

There is also the option of a mortgage payment holiday if you’re really struggling to meet payments during this time.

•    A payment holiday is an agreement between the customer and lender not to make mortgage payments;

•    Partial payment holidays are also acceptable – this is where there is an agreement to pay a reduced payment;

•    Any mortgage repayment holiday must be agreed with the lender, just cancelling a direct debit, would likely result in a missed payment being recorded on the customer’s credit file;

•    The customer still owes the amount not paid as a result of the mortgage repayment holiday – this will accrue interest (unless advised otherwise by the lender);

•    Customers will have to make up the missed payments – usually, this can be achieved by increasing the term or the monthly repayment, however, other, more suitable options might be appropriate;

•    If a customer is experiencing difficulties, they should let the lender know (you may wish to support them with this);

•    FCA guidance makes clear regarding credit files; they [the consumer] should not be negatively impacted (however, there are other ways lenders can tell whether an individual has taken a mortgage repayment holiday, which could impact future creditworthiness assessments);

•    FCA guidance also states – “You [consumer] should not apply for a mortgage payment holiday if you are not experiencing or do not reasonably expect to experience payment difficulties.”

Why don’t we discuss the options mentioned, and find the right choice for you?

Talk to our team