Coronavirus, self isolation &
mortgage repayment relief

Stuart Bowman

9-minute read

Last updated: 2nd November 2020

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November 2nd - Update: Further extension to mortgage holiday announced.

The coronavirus mortgage holiday scheme had been due to end on November 7th. However, it will now continue for a further 6 months.

What hasn't changed is the maximum length of holiday, it remains at 6 months.

Around 1.6 million people are now concerned that they will struggle to pay their mortgage over the next 6 months. If this affects you, the FCA has advised you to speak to your lender to arrange a tailored support plan. Of course, if Mojo is your broker we will happily look at other options in the market for you too.

Remember, you should speak to your lender to extend the holiday or arrange a new plan. Don't assume it will happen automatically. Also, during the mortgage holiday, interest will still accrue.

Go here for the latest info on the November lockdown and the mortgage market.

May 22nd - Update: Treasury announces extension to mortgage holidays

If you're struggling to pay your mortgage due to coronavirus you will be able to extend your repayment holiday for a further 3 months.

Initially rolled out in March, holiday payments allowed those affected by lockdown to defer mortgage repayments without any impact on their credit score.

The Treasury has made the extension to the scheme but the FCA has stressed if you can afford to restart mortgage payments "it is in [your] best interests to do so".

March 17th - Update: Chancellor Rishi Sunak announces all lenders will offer a 3-month mortgage relief holiday

In the second daily Government briefing of the coronavirus outbreak, the Chancellor outlined that anyone affected by the virus will be eligible for a 3-month mortgage repayment relief window.

Previously mainstream lenders such as Lloyds, TSB, RBS and Natwest had outlined details of their coronavirus and mortgage policies, this update means everyone affected by the coronavirus outbreak will get the same mortgage help.

List of bank mortgage relief phone numbers:

These are the numbers to ring if you need mortgage relief as it stands, some lenders are starting to introduce specific helplines for coronavirus: This list will be updated.

As mentioned, these mortgage payment relief numbers will be kept up to date, but if your bank isn't listed yet and they have issued no specific coronavirus payment relief advice, get in touch via the main mortgage line telephone number.

Responding to the Chancellor's measure, UK Finance, also said "the offer of a payment holiday can be made available to customers not already in arrears and up to date with payments."

How will coronavirus mortgage holiday relief work?

According to UK Finance:

  • Your mortgage repayment will change to £0 for a temporary period (3 months in this case).
  • You will still accrue interest in this time, however
  • Normally to be eligible for mortgage relief, the lender would need to assess your finances while considering all forbearance options. during the coronavirus outbreak this will not apply. Instead it will be replaced by a more straightforward self-certifying process.
  • Lenders will take steps to help make sure that coronavirus mortgage relief doesn't not affect your credit score. Natwest and Lloyds have already confirmed this
  • This special government-led mortgage holiday is only available to you if you are affect by coronavirus and don't already have mortgage arrears. If you do have arrears, please speak to your lender as soon as possible.

Will coronavirus affect my mortgage application?

Possibly. Your mortgage application is unlikely to be affected by coronavirus provided your own personal circumstances do not change.

At most banks and lenders it's very much business as usual. Affordability checks, and underwriting will continue as normal. Some lenders are experiencing a small delay at the valuation stage, but this has had a minimal impact so far.

However, the government has advised people not to move house during the stay-at-home measures.

There is some movement among available rates. There is more on that below and on this base rate cut page, but if you are thinking about applying for a mortgage, know that rates are already at an historic low, and should they fall while you are going through the mortgage process (something that usually takes 6 weeks), there should be opportunity to take advantage of that.

You can currently check the best mortgage deals each mainstream bank is offering at a glance.

March 11th - Update: The Bank of England cut interest rates due to coronavirus? Will it affect my mortgage?

The Bank of England has rolled out an emergency cut in interest rates due to coronavirus. The base rate is now 0.25% - down from what was already a relative historic low of 0.75%. The Bank hopes it will help support the economy during the the coronavirus outbreak.

More support was announced in The Budget on March 11th.

In terms of your mortgage rate changing, that depends on the type of mortgage you have:

If your lender is going to change your rate, it is likely they will let you know first.

What if I can't work because of coronavirus?

Some lenders have suggested they may offer mortgage repayment relief for those homeowners "directly or independently" affected by coronavirus.

Stephen Jones, Chief Executive of UK Finance, which represents 250 companies across the sector, including mainstream mortgage lenders, said: "Banks, building societies and credit card providers understand that some of their customers may be worried about the effect that contracting the coronavirus could have on their finances, for example due to a drop in income or because of unexpected expenses or bills to pay."

This could be especially useful to those who are self-employed or don't qualify for statutory sick pay, as the PM Boris Johnson has already outlined people will receive statutory sick pay from the first day off work, not the fourth.

How do I get mortgage relief if I'm affected by coronavirus?

Mr Jones explained that lenders could offer increased overdrafts or allow repayment relief, however, he did stress that asking for help early is key.

The announcement is understood to go above and beyond banks' usual policies on supporting customers in financial difficulty and it is still unclear as to how it would work.

Also, some lenders have offered mortgage repayment relief to customers who have encountered financial hardships in the past, but this is thought to be the first time lenders have suggested the policy could be offered en masse for a public health situation.

I'm self-employed and affected by coronavirus, how do I pay my mortgage?

As mentioned, first of all speak to your lender as soon as possible. Many banks, as well as the UK Finance, have said mortgage relief and mortgage holiday policies have been put in place for these circumstances.

Also check your insurance policies.

As an online mortgage broker when we advise you on your mortgage we have a duty of care to ensure you have cover that helps you continue to pay your mortgage whatever the circumstances.

Protection insurance can be tricky at the best of times, so if you need any help either establishing if you are covered for loss of income – or taking out a new policy to protect you in the future, our specialists can help you. And they are just a phone call away.

March 10th - Update: What banks are offering a mortgage holiday payment due to coronavirus?

RBS and Natwest, TSB and Lloyds have said customers can make use of a mortgage window so far. RBS stipulated repayments could be postponed for up to 3 months, but each case will be treated on an individual basis.

"We understand that there may be circumstances where a personal customer may fall into financial difficulty as a result of the impacts of coronavirus, for instance, loss of income," a RBS spokesman said.

"We will look to understand each customer's situation on a case-by-case basis and can offer a number of options to help them manage their finances."

How else does coronavirus affect mortgages and property?

The economic fallout is still being evaluated. However, while posting a February House Price Index, in which the average house price rose 0.3% to £240,677, Halifax warned: “Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year."

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