Brilliant Mortgage Holiday Question !!!!!!!

haras_n0sirrah

It should not affect if you can get a new fixed rate. It may mean they dont let you port the mortgage if you decide to move in the not too distant future so only do this if you are not planning on moving house for a while 

Thrugelmir

TheAble said:

Thrugelmir said:

TheAble said:

Thrugelmir said:

The bank doesn't have to offer you a new fixed rate mortgage product. You could simply default onto their expensive SVR. Likewise what they do offer you, could be influenced by your account conduct. Lender holds all the cards. 

Might be a bit unfair if they did that though? The mortgage holidays aren't meant to affect your credit record. 

They haven't affected your credit record as such. What they will impact is any future decision. Though over time this of course dilutes as time heals. Payment holidays should never be requested on a whim. Under normal circumstances lenders will approach the matter differently. Not simply grant them on request. 

Lenders will be using this backstop in order to close any loophole of abuse. There'll be some "clever" people who think that they can exploit this situation to their own advantage. 

Money is priced to reflect risk of default. Lending rates have a methodology behind them. 

I do appreciate what you're saying. I just think it would be viewed as unreasonable if a lender grants a customer a covid-related payment holiday, and then a few months later when that same customer's fixed rate comes to an end and he asks for a new fixed rate, to then say no, we're putting you on SVR i.e. we're going to make your mortgage less affordable for you.
I fully accept of course that they're entitled to do this, but they also have a duty to treat customers fairly.

I doubt that they'll not be offered a new product. Not in the lenders interest to do so.  As putting borrowers under further undue stress helps no one. Lenders work at the macro not the micro level.  Mortgage books are written as a whole not as individual loans. Administration of defaulted accounts is an expensive and time consuming business. Ultimately everyone will pay if the economic climate deteriorates further.  

dunstonh

TheAble said:

Thrugelmir said:

The bank doesn't have to offer you a new fixed rate mortgage product. You could simply default onto their expensive SVR. Likewise what they do offer you, could be influenced by your account conduct. Lender holds all the cards. 

Might be a bit unfair if they did that though? The mortgage holidays aren't meant to affect your credit record. 

They are not allowed to be marked as arrears on your credit report but new lenders are allowed to take them into account with new lending decisions.  Existing lenders can with further advances.