Repercussions of 3 month Mortgage break - Covid-19

[Mortgageissue]

When we went into Lockdown we were warned that my DH’s work would put him on furlough and thought we’d go ahead and suspend paying our mortgage for 3 months. So our first ‘non-payment’ was May 1st and our next payment will be August 1st.

It transpires that my DH has actually been able to work on full pay but might be furloughed for a month in July. We are currently on a 2-yr fixed rate mortgage with Nationwide that’s up in November.

Do you think ourhaving furlough

Sorry meant to say:

Do you think our having furloughed for 3 months will affect our ability to negotiate a new mortgage deal? And do you think there will be many good deals to be had come November. I’m wondering if the financial situation will mean mortgages sky rocket again? We only bought less than 18 months ago and have £150k to clear in a 16 year term so quite a way to go yet!

Hello, mortgage broker (on mat leave) here. As long as he's back at work when you come to remo you should have no problem securing new deal with most lenders.

If you stay with Nationwide you should be able to switch to a new rate without any issue, furloghed / payment holiday or not. If you are concerned about rates rising you can apply for a new rate 5 months before your current deal with Nationwide ends (and should perhaps consider something longer than a 2 year fixed if your circumstances allow).

If he is still furlough and you want to move your mortgage to a new lender then yes, there might be an issue depending on the lender.

You'll obviously have a slightly larger balance to remortgage having taken a break, and you minty payments will go up a bit at the end of the holiday.

Best thing to do would be to get this all from the horses mouth and give Nationwide a ring though. Hope that helps!

Thanks Renegade that’s useful to know that we can be applying for a new deal around 5 months before the term is up. We were 1st time buyers with a poor historic credit record so the 2 year fixed rate was the best deal our mortgage adviser could find for us. Fingers crossed that we weather this storm. My partner has been incredibly lucky being able to work from home and as long as the company he works for keeps afloat we should be earning full pay when we negotiate the new rate. I’m not sure if I’ll get a job any time soon as the job I was supposed to start in February/March disappeared because of all the uncertainty. I’m freelance too so we don’t factor my wages into the mortgage deal because I wasn’t working when we got the last one.

Thanks again and hope you’re enjoying your maternity leave (although it must be a bit more restricted than you imagined?!)

Hi, I work for a building society and have been directly involved in helping with plans for customers to take mortgage payment holidays. You won't be penalised by a new lender for taking a payment holiday but as the other poster says it might be that your mortgage amount goes up, so you'll need to be able to show a new lender that you can afford it. Internal with Nationwide I see now issues

Don't know about the mortgage but the new furlough rules means that anyone not furloughed on or before 10th June won't be eligible so he won't be able to be furloughed for a month in July if he hasn't been furloughed before 10th June