Banks to offer more flexibility with mortgage repayments - will this apply to those in a fixed term?

Sarah1Mitty2

housebuyer143 said:

Dandytf said:

Help won't effect Credit Score, is that Score or Rating.

It might not, but your lender will have it noted on their system and will almost certainly hold it against you

Yep, this is for people in real difficulty, if it ever becomes more than a soundbite that is, for example couldn`t a bank say to the government  "No, we will follow our usual arrears procedure thanks"? Either way if you are looking at mortgage debt repayments well beyond your means to pay at higher rates what difference will 6 months or 12 months make, a typical mortgage  is 25,30,35 years?

MWT

Sarah1Mitty2 said:

... for example couldn`t a bank say to the government  "No, we will follow our usual arrears procedure thanks"?

The 'agreement' covers lenders with about 75% of the market between them, so that currently leaves 25% without this support.

We'll have to see how many of the others agree to follow...

FashionHeart

At the start of the COVID pandemic, I took out a few payment holidays for my CCs and loans, but I was still able to get a mortgage at the end of it a few months later.
But then it also depends on individual circumstances too.

housebuyer143

FashionHeart said:

At the start of the COVID pandemic, I took out a few payment holidays for my CCs and loans, but I was still able to get a mortgage at the end of it a few months later.
But then it also depends on individual circumstances too.

And many mortgage lenders specifically excluded customers who had taken furlough or payment holidays on mortgages from remortgaging to them. Just because it doesn't affect your credit score doesn't mean it isn't looked at negatively.

MWT

These are certainly not consequence-free decisions so not to be undertaken in pursuit of a few extra ££ on a savings account, but can be a life-line to those in dire need, just make sure you understand the consequences of shifting to interest-only on term and monthly payments in the future.

Even holding the payment at the current level for a while, when interest rates have increased, as offered by some lenders, will have a noticeable impact on the monthly payment when you have to catch up later...

Ksw3

I have a feeling a lot of people will apply seeing it as free money and then be very unhappy with the consequences that i doubt will be properly explained.

I've always been risk averse so we bought 50k below our max borrowing amount but for so many years everyone was told to go to the max. I had people tell me this and say that my monthly mortgage payments would only go down over time...

MWT

Ksw3 said:

I have a feeling a lot of people will apply seeing it as free money and then be very unhappy with the consequences that i doubt will be properly explained.

In the current regulated climate I would expect the explanations to be solid, the problem is trying to get people to actually read and understand at a time when they are understandably fixated on the monthly payment going down, or even just not going up...

lookstraightahead

I thought applicants were stress tested to these percentages?

Dandytf

housebuyer143 said:

Dandytf said:

Help won't effect Credit Score, is that Score or Rating.

It might not, but your lender will have it noted on their system and will almost certainly hold it against you

That's what I heard as if it was Specific to Score Only, then I would have expected to hear, Rating would be uneffected.