Mortgages and Covid-19

For some people, more time at home encouraged them to start looking for somewhere new. For others, it’s a struggle to stay secure in their homes because of furlough, redundancies and an unstable economy. 

However you’ve been affected, this page is updated regularly to include the latest information about mortgages and Covid-19.

Mortgage holidays 

If you’re struggling to pay your mortgage, there are two ways you can take a mortgage holiday. One way is to use any overpayment money you’ve built up in your property, and the other way is you can take a break from paying your mortgage monthly and pay it back at a later date. The deadline for applying for a mortgage holiday is 31st March 2021.

Stamp duty

The UK government introduced this tax break to encourage people to buy property after the national lockdown. It means people can save a considerable amount of money if they buy a property under £500k between now and 30th June 2021.

Property prices

According to Rightmove, “prices of newly-listed properties are at a record high and homes are selling quicker than ever before”. There’s been a boom in the property market with the Land Registry’s UK House Price Index reporting an increase in property prices.

Interest rates

As a response to the global pandemic, the Bank of England cut interest rates to 0.1%. If you’re on a variable rate mortgage or a tracker mortgage, your mortgage repayments will go down. If you’re looking for a mortgage, now’s a good time to get a great rate.

First-time buyers

Because stamp duty has been cut until 30th June 2021, it could be a great time to buy your first home. That’s because you can save thousands because the stamp duty fee has been cancelled.

Remortgaging during Covid

Remortgaging because interest rates are low is always a good reason. Currently, interest rates are at an all-time low, but lenders are changing their behaviour and the kinds of mortgages they’re offering, so it can be a slower-than-usual process.

Getting a mortgage on Furlough

The Furlough scheme is due to end on 30th September 2021. You can still be approved for a mortgage while you’re on the furlough scheme because you’re still employed. But a lot of people are worried about how their reduced earnings will affect their chances after Furlough.

The mortgage market

Lenders are seeing record numbers of mortgage applications. This is slowing the process down for people who’re applying for mortgages, and also making lenders change how they do things. Many lenders are actually reducing the amount of mortgages they’re willing to sell.

The government has announced a new scheme, offering people the chance to get a mortgage with just a 5% deposit. This scheme will be available to first-time buyers and home movers alike.