The Covid-19 pandemic has had a major impact on the global economy, and the mortgage market is no exception. As the pandemic continues to affect the financial stability of many households, lenders are predicting that the take-up of mortgage holidays will be lower than the take-up of payment holidays.
Mortgage holidays are a form of financial relief for homeowners who are struggling to make their mortgage payments due to the pandemic. They allow homeowners to temporarily suspend their mortgage payments for a period of time, usually up to six months, without incurring any late fees or penalties. Payment holidays, on the other hand, allow homeowners to temporarily reduce their monthly payments for a period of time, usually up to three months.
The main difference between the two types of relief is that mortgage holidays provide a complete break from mortgage payments, while payment holidays only reduce the amount of the monthly payment. This means that while a homeowner may be able to save money in the short-term with a payment holiday, they will still have to pay off the full amount of their mortgage at some point in the future.
Lenders are predicting that the take-up of mortgage holidays will be lower than payment holidays due to the fact that they require a longer commitment from borrowers. Payment holidays are generally seen as a more attractive option for those who are struggling financially due to the pandemic, as they provide a more immediate relief from financial strain.
It is important for homeowners to understand that while both types of relief can provide financial assistance during this difficult time, they should carefully consider their options before making any decisions. Taking out a mortgage holiday can provide much needed relief in the short-term, but it can also lead to long-term financial problems if not managed properly.
It is also important for homeowners to understand that lenders are not obligated to offer either type of relief, and that they may have different criteria for approving applications. Homeowners should contact their lender directly to discuss their options and determine if either type of relief is available.
The Covid-19 pandemic has had a major impact on the global economy, and the mortgage market is no exception. Lenders are predicting that the take-up of mortgage holidays will be lower than payment holidays due to the fact that they require a longer commitment from borrowers. It is important for homeowners to understand their options and contact their lender directly to discuss their eligibility for either type of relief.