Robin Fieth, chief executive of the BSA, said: “We welcome today’s announcements by the Economic Secretary to the Treasury and the FCA and the close collaboration between Treasury, lenders and regulators which has led to them.
“Looking ahead we would encourage those borrowers who are able to pay to do so, as this will be to their own longer-term benefit. However, borrowers can also be assured that there will be no cliff-edge moment as tailored support will be available for those who need it, whenever that may be.
“Lenders will be contacting all borrowers with a repayment holiday before it comes to an end to lay out potential next steps and the support that is available. Any borrower with concerns is encouraged to get in touch with their lender sooner rather than later. Lenders will be working hard to provide support to all who need it as quickly as they can.”
Consumer research
The BSA conducted consumer research with YouGov among 439 homeowners and 65 landlords with a mortgage repayment holiday.
This research found that mortgage holidays have helped people in these tough times with 93% of homeowners saying that it has been fairly or very helpful and just 6% saying that it has not been helpful. However, among landlords, 75% have found the payment holiday helpful but 21% said it has not been helpful.
Most borrowers (68%) are fairly or very confident that they will be able to meet their mortgage payments once their payment holiday ends. However, more than a quarter (27%) are not confident they will be able to pay.
The BSA said that lenders will target tailored support for these people in particular, to ensure they get the help they need. Landlords seem to be less certain than homeowners with 34% not very or not at all confident that they will be able to pay.
These results indicate that the preferred repayment method for most is to repay over the remainder of their mortgage term with 53% of homeowners and 32% of landlords favouring this approach.
Amongst homeowners taking a mortgage holiday, 15% say that they would seek an extension to their payment holiday compared to 18% of landlords.
Borrowers preferred exit plans: most want to pay over the remainder of the term
| Option | Homeowners (%) | Landlords (%) | All
(%) |
| Repay the interest gradually over the rest of the term of the mortgage | 53 | 32 | 51 |
| Extend the mortgage to reduce the amount of each monthly payment | 10 | 24 | 12 |
| Seek an extension to the payment holiday | 15 | 18 | 15 |
| Repay the interest in 1 lump sum | 7 | 15 | 8 |
| Switch to interest only | 2 | 3 | 2 |
| Other | 1 | 1 | 1 |
| Don’t know | 6 | 12 | 12 |
