With the dust settling and the ink drying on the hardship applications it is time to take a breath and answer some questions about the mortgage holidays. The lenders have made it quite clear they are prioritising the thousands of hardship applications and rightly so.
As such, questions relating to implications of taking up the mortgage holiday opportunity have been coming up.
Firstly, the term ‘mortgage holiday’ isn’t accurate. It is more of a deferral of payments for up to 6 months, therefore in the long term you will still pay it as interest is still charged and added to the loan. Some mortgages will have time extended and others may have higher repayments to cover the holiday.
The good news is lenders have stated that your credit, good record of payments and future applications, won’t be affected by the mortgage holiday providing it is as a result of Covid 19.
Westpac have stated on their website “customers who are not in arrears at the time they are granted this loan repayment deferral will be marked with a “Payment not Required” flag, which will be reported to credit agencies, but will not impact on a customer’s ability to get new credit in the future”.
The banks are sympathetic to the pressures facing their customers and I can assure you they are putting you first before new applications from us. We have heard of several successful mortgage holiday applications from our clients which is encouraging.
Although getting through to the bank services may be challenging, this will only improve in the coming weeks.
When you do get through to your bank it would be really helpful to be clear on what you are asking for. Some banks have forms to complete while others it is via a website inquiry.
Be clear whether you want to go interest only or a mortgage holiday with no payments for up to 6 months.
Be open about your financial situation and income changes, for example; reduction in hours or redundancy. Provide any documents from your employer that support your position
If in doubt call us on 0800 426 337 and we can help you out and send the correct links.
Book a Meeting
Vicky Springintveld
Business Development Manager
Phone: 0800 337 426
Email: [email protected]
