Mortgage Holiday in UK May have been a Double-Edged Sword

Mortgage holiday might mean problem with new loan Credit: Pixabay

WHEN the Financial Conduct Authority (FCA) in the UK announced that those suffering from financial difficulties during lockdown could apply for a three-month mortgage holiday (which has since been extended by a further three months) they inferred that this would not affect individuals credit ratings.

Whilst this is technically true, the reality is somewhat different as a number of British borrowers are now finding out as it appears that if they want to apply for a separate loan, they may well be declined because banks have the option to check their bank statement and see that the mortgage holidays had been taken.

According to the BBC, Virgin Money has said that it will not let use of the mortgage holiday affect its lending decisions but other banks and lenders are proving to be less amenable.

A spokesman for Halifax (part of Lloyds Bank Group) has advised customers to restart mortgage payments for at least three months before applying for a loan, so it looks as if what appeared a lifeline at the time might end up as a mixed blessing.

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Written by

John Smith

Married to Ophelia in Gibraltar in 1978, John has spent much of his life travelling on security print and minting business and visited every continent except Antarctica. Having retired several years ago, the couple moved to their house in Estepona and John became a regular news writer for the EWN Media Group taking particular interest in Finance, Gibraltar and Costa del Sol Social Scene. Share your story with us by emailing [email protected], by calling +34 951 38 61 61 or by messaging our Facebook page www.facebook.com/EuroWeeklyNews

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