One in nine home loans in the UK are now on a mortgage holiday because of measures to support those affected by the coronavirus pandemic, new figures show.
UK Finance, the trade body for Britain’s banks and building societies, said lenders had agreed to give repayment breaks to more than 1.2 million mortgage borrowers.
The number of payment holidays in place more than tripled in the two weeks between March 25 and April 8, growing from 392,130 to 1,240,680, the organisation said.
That meant an average of around 61,000 were being granted by lenders every day.
The figures were disclosed after a series of measures to help people facing financial difficulties due to the pandemic – including mortgage holidays – were announced by lenders a month ago.
For the average mortgage holder, the payment break amounts to £260 a month of suspended interest payments.
UK Finance chief executive Stephen Jones said: “The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.
“We understand that the current crisis is having a significant impact on household finances for people across the country.”
However, Mr Jones said that payment holidays were not the right solution for everyone and borrowers should check with their lenders about the support available and how to apply.
The mortgage holidays are designed to help people struggling to make their payments, for example if they have had a pay cut or their work has temporarily stopped due to COVID-19.
They can request a mortgage payment holiday of up to three months.
Payment holidays are available to customers who are up-to-date on their mortgage payments. They will still owe the money and interest will still accrue.
Homeowners applying for a mortgage payment holiday will need to self-certify that their income has been either directly or indirectly impacted by coronavirus.
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UK Finance has said firms will make every effort to ensure payment holidays do not negatively impact on credit files.
It added that telephone lines were extremely busy so customers were advised to look at their lender’s website in the first instance.
Borrowers have been urged not to cancel their direct debits before a payment holiday has been agreed, as this will be counted as a missed payment and could impact their credit file.
Banks have been under pressure to act as the coronavirus crisis takes a heavy toll on the economic situation of millions of Britons.
Many have already axed dividends and cut bonuses for top bosses.
But analysis by Sky News last week revealed that banks were raising interest rates on mortgages, defying efforts by the Treasury and Bank of England to ease the burden on households.