Eight in 10 mortgage customers who have previously taken a payment holiday are now back to making full repayments, according to industry analysis.
Some 130,000 mortgage payment holidays were in place at the end of December 2020, which is down from a peak of 1.8 million in June 2020, according to UK Finance.
It means that, across the UK, one in every 84 mortgages was subject to a payment deferral at the end of last year, compared with one in six in June 2020.
There were 130,000 mortgage payment deferrals in place at the end of December 2020, according to figures published today by UK Finance. Lenders remain committed to supporting mortgage customers facing financial difficulties into 2021. Details here > https://t.co/CMnex5aC9npic.twitter.com/jdqPNlXW4a
— UK Finance (@UKFtweets) January 20, 2021
The mortgage payment holiday scheme has previously been extended to the end of July 2021, to help those struggling financially as a result of the coronavirus pandemic.
The deadline to apply for a mortgage payment holiday is March 31 2021.
With payment holidays needing to end by July 31 2021, those wanting to take the maximum holiday of up to six months are being urged by UK Finance to apply before their February mortgage payment is due.
This will mean the payment holiday can run between February and July.
Those in financial difficulty are also being urged by the trade association to contact their lender before missing a payment.
— Financial Conduct Authority (@TheFCA) January 19, 2021
Customers who have already benefited from a full six-month payment deferral, but are continuing to experience financial difficulty, should contact their lender to discuss tailored ongoing support.
UK Finance said it will always be in the long-term interest of customers who are able to do so to resume making payments, otherwise the size of their debts will continue to increase as interest is added.
Eric Leenders, managing director of personal finance at UK Finance, said: “With new lockdown restrictions in place, the banking and finance industry is continuing to help customers through these challenging times, including by providing tailored support appropriate to their needs.
“It will always be in the long-term interest of borrowers to resume making payments if they are able to do so.
“However, for anyone who is still struggling ongoing support will be available, and so we would urge customers to contact their lender to discuss their options before missing a payment.”