The Chancellor of the exchequer has announced that a three-month mortgage break will be allowed for borrowers in difficulty due to Covid-19.

In a press conference this evening, Rishi Sunak said that he has been working with lenders to allow those impacted by the Coronavirus to take a mortgage ‘holiday’.

He also announced a £330bn package of guarantees for businesses to assist those ‘in need of cash’ in surviving a loss of business due to the virus outbreak and that no shops or pubs will pay business rates for 12 months.

Sunak says: “We will support jobs, incomes and businesses”.

Earlier today, the UK Mortgage Prisoners Action Group called on the government to halt repossessions and freeze repayments for those struggling due to the Coronavirus.

Quilter Financial Planning proposition director Charlotte Nixon says: “Many lenders such as Lloyds Banking Group and NatWest have said publicly that they are putting in measures to protect their mortgage customers in light of the biggest health crisis this nation has faced in a century. 

“However, today’s extra assurances from Chancellor Rishi Sunak that lenders will offer a three-month mortgage holiday will do a lot to quell the nerves of all those currently worried about their mortgage.

“At this uncertain time, three months may not be enough for some people but Sunak did mention that this was just the next step of the government’s measures so borrowers may still be set to get more if the crisis is prolonged further.

She adds: “Most borrowers will choose not to take the holiday if they are able to avoid it, as delaying also extends the borrowing period, which isn’t normally a good idea unless it is really essential.

“This new option should only be used by those who simply can’t meet repayments because of the crisis and need the breathing space to stabilise their finances.”