Property News > Mortgage payment holidays should be carefully considered, warns property lawyer

Mortgage payment holidays should be carefully considered, warns property lawyer

Landlords should err on the side of caution when it comes to deciding whether or not to take a mortgage holiday, with a Midlands property lawyer reminding homeowners that it could have a negative impact in the longer term.

Currently, all landlords have the right to apply for a three-month payment holiday on their
mortgage as a result of the coronavirus crisis, but Javed Ahmed, an associate at law firm
mfg Solicitors says that those who opt for this will be paying their loans off for a longer
period.

He said: “Effectively, the payment holiday introduced by the government in recent weeks
means mortgage payments are put on pause for a set period, currently three months.

“The offer is available to homeowners who had been up to date with payments before the
crisis. Landlords can also claim however, they are expected to pass the savings onto their
tenants who are struggling to make rental payments”

“The mortgage holiday is one of many measures by the government to help people through
the crisis and quite rightly it is a welcome move. However, there are many people not
reading or aware of the small print.

“The main downside of taking a mortgage holiday is that interest is still payable and it will
build up over those three months, meaning you will owe more on the mortgage and it will
take people that bit longer to pay it off.

“It is an option many people are taking and is clearly better to take a little longer to pay off
the mortgage than risk losing your home altogether. I just want people to be aware of the full picture.”

To be eligible, applicants must have lost work and salary as a result of the government-
imposed lockdown, designed to limit the impact of the coronavirus outbreak. Ahmed also
pointed out that landlords do not have to have contracted the virus in order to be able to
apply.

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