England's housing market opens up

The government has slightly relaxed the coronavirus lockdown in England.

You’re now allowed to visit an estate agent and view properties, surveyors are allowed to visit properties and provide a valuation, and you can hire a removals company to help you move.

Mortgage applications that had been paused by lenders are now being processed. And if you’re part of a frozen property chain, it can start moving again.

If you’re waiting for your mortgage application to be approved, we’ll send you more info as soon as we get an update from your lender.

If you're expecting to complete in the next few weeks, we recommend calling your solicitor now to get an update. We'll also be contacting your lender and solicitor to make sure your mortgage keeps moving.

You can always get in touch with your adviser or case manager by phone or email if you have any questions.

Keep reading this guide to learn more about how coronavirus, furlough and mortgage payment holidays could affect your mortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Trussle is still open and will stay open

We know things are pretty stressful at the moment.

With new government guidance every few days, and an uncertain few months ahead of us, it’s perfectly understandable to be feeling a bit worried about things.

We’d like to let you know that we’re doing our best to keep your home purchase or remortgage moving along as quickly as possible.

Trussle is still open – and will stay open – no matter what’s happening with the coronavirus pandemic.

We’ve emptied the fridge, given the plants a good watering and are now all working just as hard from home.

We’re an online broker powered by super-smart technology and amazing mortgage experts.

You can still get in touch with your adviser or case manager by phone, email or message as you normally would.

We’ll get in touch if anything changes with your mortgage.

Changes to the mortgage market

Some lenders temporarily stopped offering certain mortgages because of the coronavirus pandemic.

This was because a surveyor needs to visit the property to carry out a valuation for some mortgages and it would’ve gone against social distancing rules.

As of 13 May 2020, lenders announced that in person valuations can start back up again.

Check with a broker to find out more about the mortgages available.

Lenders

Because of the coronavirus pandemic there are very few lenders who will give you a mortgage if you only have a 5% deposit or a loan to value (LTV) of 95%.

If you only have a deposit of 5% you could try to improve your LTV by saving up more money or consider buying a cheaper house.

If you have a deposit of 10% or equity in your home of at least 10%, there are currently 4 big lenders who may be able to give you a mortgage: HSBC, Virgin Money, Clydesdale and Accord.

If you have a deposit or equity in your home of 15% or more, there are now plenty of lenders who may be able to give you a mortgage.

The mortgage market is changing every day. Speak to a mortgage adviser at Trussle who can help you find the right mortgage for your situation.

More information if you're buying a house or getting a mortgage

Here are some extra details if you're currently in the process of buying a house or remortgaging.

I'm about to complete on my new home. Can I still exchange and move in?

Previous government guidelines urged people not to move home during the current pandemic.

On the 13th of May the government stated that moving home was once again allowed to go ahead as normal.

However, social distancing is still encouraged.

What if I’ve exchanged and can’t complete?

Lenders have agreed to help homemovers who’ve exchanged contracts and set their completion dates by offering mortgage extensions of up to 3 months.

This extension will vary from lender to lender. It could mean pushing back the start date of a mortgage deal or extending a mortgage deal at the end of its term.

But the effect will be the same.

Get in touch with your Trussle mortgage adviser and they’ll let you know what your lender has planned.

Can I still remortgage?

Lenders are changing the availability of their  products and the eligibility criteria on an almost daily basis.

Even so, we’re still helping lots of customers successfully remortgage. 

We’ll find the best deal for your personal circumstances. If your adviser finds a better deal that you can switch to, they will do that.

We’ll try to keep you up to date with lender delays and will bear this in mind when we make our mortgage recommendation.

One thing that could cause a delay is the valuation.

Valuation surveys are normally done as part of the remortgage process. Any that need a physical valuation have been put on hold for the next few weeks.

Where they can, lenders are moving to an automated valuation model (AVM) which means that remortgages can still happen. 

AVM is a way of using data to value a property so a surveyor doesn’t have to visit it.

Applications can still be reviewed, documents can be uploaded and checked, and where possible an AVM can be carried out. So you can still remortgage.

What if I can't pay my mortgage?

See the mortgage payment holiday section of this guide for more information.

What about the base rate change and my mortgage?

Lenders are changing the availability of their mortgages and the eligibility requirements on an almost daily basis.

We’re also seeing certain products and rates being taken off the market.

For new mortgages, lenders haven’t generally changed their fixed rates after the Bank of England base rate cut from 0.75% to 0.1%.

Fixed rates

There'll be no change to your monthly payments as you’re on a fixed rate until the end of your fixed rate term.

If this is ending in the next few months it may be time to remortgage.

Variable rate and standard variable rate (SVR)

The base rate cut could mean your monthly repayments will go down. Your lender will let you know what this means for you and your payments. 

Tracker

Your interest rate tracks the Bank of England base rate (plus a bit extra), so your rate will change. 

Ask your lender if you’ve got any questions about what you’ll be paying now.

Should I delay my mortgage application?

Lenders are changing the availability of their products and the eligibility rules on an almost daily basis.

We’re also seeing some mortgages and rates being taken off the market. 

We’ll still find the best deal to suit your personal situation.

And if a better deal becomes available later on that you can switch to, we’ll do that.

You can discuss it with your adviser who’ll be happy to talk you through your options

Can I remortgage if I’m on a mortgage payment holiday?

You can still remortgage if you’re on a payment holiday.

The Financial Conduct Authority (FCA) have said that taking a mortgage payment holiday shouldn’t affect your credit history.

As long as your lender is confident that you can afford your mortgage payments, you should be able to remortgage as normal.

Coronavirus and mortgage payment holidays

The government announced in March that you can apply for a 3 month mortgage payment holiday if you can’t pay your mortgage because of coronavirus.

On 22 May the financial regulator said that homeowners can ask their lender to extend their mortgage payment holiday by another 3 months.

What is a mortgage payment holiday?

A mortgage payment holiday is a break from paying your mortgage which has been agreed by your lender.

Read our guidance about what the UK's 10 largest lenders are doing about mortgage payment holidays due to the coronavirus.

If you take a mortgage payment holiday you will need to make extra repayments in the future.

Interest will build up during your payment holiday, which means you'll end up paying more in the long run.

You can ask your lender to reduce your interest rate during the payment holiday, but they don't have to agree.

Should I take a mortgage payment holiday?

If you are struggling to pay your mortgage because of coronavirus, you should consider taking a payment holiday.

Another way to reduce your payments is to remortgage to a better deal. Use our remortgage calculator to see how much you could save.

You can also ask your lender for a partial payment holiday, or a payment holiday for only 1 or 2 months.

If you take a mortgage payment holiday, you might not be able to remortgage until your holiday ends and you start repaying your mortgage again.

How to get a mortgage payment holiday

Get in touch with your lender as soon as possible. You may be better off doing it online as there are long call queues.

You can apply for a mortgage payment holiday up until the 31 October 2020.

You won't need to prove that coronavirus has affected you finances, but you will need to be up to date with your mortgage payments.

Because of the current situation lenders won't do the usual detailed check of your finances when you apply.

They'll trust that you give them accurate information.

You can, however, ask your lender to take a close look at your finances.

Taking a mortgage payment holiday because of coronavirus shouldn't affect your credit score if you've got your lender's permission. But check with your lender first.

How to extend your mortgage payment holiday

You can extend your mortgage payment holiday if your financial situation is still being affected by the coronavirus pandemic.

You should contact your mortgage lender as soon as possible to ask for your payment holiday to be extended.

How to pay the missed payments

There are usually two ways that you can pay the missed monthly payments at the end of the holiday.

  • increase your monthly mortgage payments

  • increase the number of months you pay back your mortgage

Remember that if you increase the number of months you pay your mortgage it'll be more expensive in the long run as you'll pay more interest.

Other ways to reduce your monthly repayments

There are other ways to reduce your monthly payments if you don't want to take a mortgage holiday.

These include:

  • increasing the number of years you pay back your mortgage

  • switching to another mortgage

If you think you may not be able to pay your mortgage, get in touch with your lender as soon as possible. Tell them your situation and ask them what your options are.

Mortgage payment holidays for the largest UK lenders

Here is more detailed information for some of the UK's largest mortgage lenders. If your mortgage lender isn't here, check their website or give them a call.

Barclays

You can apply for a mortgage holiday if you've got a residential mortgage and your income has been affected by the coronavirus.

Barclays is looking at a way to help buy to let customers.

The quickest way to apply for a mortgage holiday of up to 3 months is to fill in the online form.

Barclays will confirm by text message if your payment holiday request has been accepted within 3 to 5 working days.

Arranging a repayment holiday won’t affect your credit file.

Find out more by visiting Barclays’ website

Halifax

You can take up to a maximum 3 months’ payment holiday if you’ve been affected by the coronavirus in any way.

The quickest way to ask for a payment holiday is to fill in Halifax's online form, which only takes 2 minutes.

They'll send you a text message in 3 to 5 days to let you know if you can take one.

If you're up to date on your payments, your holiday won't affect your credit rating and you won't go into arrears.

Find out more by visiting Halifax’s website

Lloyds

You can ask to take a break of up to a maximum of three months if:

  • everyone agrees to the payment holiday if you have a joint mortgage

  • your mortgage payments are up to date

If you've made overpayments in the past 12 months you could ask to underpay for a while, rather than take a payment holiday.

You'll need to call Lloyds before you underpay.

Find out more by visiting Lloyds' website

Nationwide

If you think you'll struggle to make your monthly mortgage payments you may be able to take a 3 month payment holiday.

You can apply for a mortgage payment holiday if:

  • your finances have been affected by the coronavirus

  • you’re up to date with your monthly mortgage payments

  • everyone named on the mortgage agrees to it

You can apply for a mortgage payment holiday until at least 30 April 2020.

If Nationwide agree to you taking one, it won’t affect your credit rating.

Find out more by visiting Nationwide’s website

NatWest

You can apply for a 3 month mortgage payment holiday if:

  • the coronavirus has affected your ability to pay your mortgage

  • you’re up to date with your monthly mortgage payments

  • everyone named on the mortgage agrees to it

The quickest way to apply for a mortgage repayment holiday is to fill in the online form.

NatWest will take a look and email you within 5 days to confirm when your payment holiday will start.

They'll also include a projection of what your mortgage payments will be after the holiday period ends.

Find out more by visiting NatWest’s website

Santander

If your mortgage isn’t in arrears, and you pay by direct debit, you can apply for a mortgage payment holiday online.

If your mortgage is in arrears, or your mortgage payment is due within the next 10 days, call Santander on 0800 023 4603.

You'll probably have to wait a while to speak to someone.

If you're up to date with your payments, the mortgage payment holiday won't affect your credit rating and you won't go into arrears on your mortgage.

Find out more by visiting Santander’s website

TSB

If your ability to pay your mortgage has been affected by the coronavirus you may be able to take a repayment holiday for up to 3 months.

You have to be up to date with your mortgage repayments for it not to affect your credit file.

If you are currently in arrears, call TSB on 0345 835 3374 for help.

Find out more by visiting TSB’s website

Virgin Money

Fill in Virgin Money's online form if you're struggling to pay your mortgage because of the coronavirus and want to take a mortgage payment holiday.

If you take a payment break, they'll make sure it doesn't affect your credit file.

At the end of your payment holiday, Virgin will work with you to agree the best way for you to repay any extra interest and make up the missed payments.

Find out more by visiting Virgin Money's website

Yorkshire

If the coronavirus has affected your ability to pay your mortgage you can ask for a payment holiday of up to 3 months.

You have to be up to date with your mortgage repayments and it won't affect your credit file.

If you have a buy to let mortgage, and Yorkshire agrees to a payment holiday because your tenant can't pay the rent, the benefit of the payment holiday should be passed on to the tenant.

Find out more by visiting Yorkshire's website

Accord

You may be able to take a payment holiday for up to 3 months if you're:

  • a residential customer

  • a buy to let landlord with tenants

  • having difficulties with your finances because of coronavirus

  • up to date with your payments

Accord will make every effort to make sure that the payment holiday doesn't affect your credit file.

Find out more by visiting Accord’s website

Coventry

If you’re up to date with your mortgage payments the quickest way to apply for a payment holiday is to complete the online mortgage payment holiday form.

If you’re behind with your mortgage payments call Coventry as soon as possible.

It will probably take longer than usual to get through.

Find out more by visiting Coventry’s website

What is the furlough scheme?

On 1 March 2020, the government put in place a temporary furlough scheme for companies to make use of if they find themselves struggling during the pandemic crisis.

Around 7.5 million workers have been furloughed since the start of the coronavirus lockdown.

This means that the government will cover 80% of each employee’s salary up to £2,500 a month.

The company can also 'top up' the salary.

Not every company will make use of the scheme, but your employer should let you know if they will.

Getting a mortgage if you’re furloughed

If you’ve recently been furloughed as a result of the coronavirus crisis then you might be worried about how it’ll affect your mortgage or remortgage application.

When calculating what you can afford, many lenders will only consider 80% of your income (up to a maximum of £2,500 a month) if you’ve been furloughed.

Some lenders have said they’ll consider 100% of your salary in cases where your employer tops up the portion your salary not covered by the government’s furlough scheme.

While you’re furloughed, many lenders may not accept your normal bonus or overtime pay.

You’ll have to show that you’ll definitely be returning to work before a lender will accept your mortgage application.

However, not all lenders will accept applications from furloughed customers.

Given the changing nature of the current situation, you could find that lenders will update their criteria. So speak to a mortgage broker for advice.

The emergency interest rate cuts and your mortgage

The Bank of England has made a second emergency interest rate cut to try and control the economic fallout of the coronavirus outbreak.

It has cut the bank rate from 0.25% to 0.1%.

This may affect your payments if you’re on a variable rate mortgage.

It won’t affect your payments if you’ve got a fixed rate mortgage.

If you’re on a tracker mortgage, which tracks the bank rate, your mortgage payments will go down.

If you’re on a discounted variable rate your lender may reduce your interest rate. Speak to your lender or broker to find out.

Should I still buy a home?

Buying a home right now may be a slower process than usual due to the backlog after many mortgage approvals were delayed.

As long as you’re confident you can afford it, there’s no reason not to buy a home because of coronavirus.

Following a brief pause, valuations can now go ahead as normal.

You’re also able to continue with your planned home move.

What should I do if I’m applying for a mortgage with Trussle?

Nothing changes if you’re applying for a mortgage with Trussle.

We can still give you a recommendation so there’s no need to wait to apply.

If mortgage rates change, we can review your mortgage to make sure you’re on the best product for your situation before we send your application to a lender.

If you have any questions, you can call, email or message us.

What should I do if I’ve already applied for a mortgage with Trussle?

There’s nothing you need to do if you’ve already applied for a mortgage with Trussle. 

We’ll make sure the mortgage we recommend for you is the best one for your situation. 

And we can review it before completion so you’re sure you’ve got the best deal.

If you have any questions, you can call, email or message us.

What if I’ve already had a mortgage offer with Trussle?

Some lenders have changed their rates following the Bank of England decision.

Some lenders have also withdrawn all or some of their mortgage products because of coronavirus.

If your lender changes their rates or withdraws the mortgage we recommended, we will review your mortgage to make sure you’re still on the best product for your situation. 

Changing your mortgage offer isn’t difficult, but it could take up to 2 weeks.

And things are taking even longer at the moment.

If you have any questions, you can call, email or message us.

Should I still remortgage?

You can still remortgage as long as you can afford the payments.

This has always been the case.

If your lender changes their rates, we can review your remortgage to make sure you’re still on the best product for your personal circumstances.

Will coronavirus affect house prices?

Coronavirus will certainly affect the economy and it may well affect house prices.

“We can’t ignore the elephant in the room,” said Miles Robinson, head of mortgages at Trussle.

“Pressure is mounting on the economy as the coronavirus outbreak escalates. As it stands, we’re yet to see its full impact on the housing market.

“Many existing homeowners will have been financially affected by the outbreak. The chancellor’s announcement to freeze mortgage repayments will help to reassure those who are worried about their ability to make their monthly payments.”

Now find out...

Sources

¹ Nationwide House Price Index: February 2020

² Guardian: UK banks offer mortgage holidays for customers affected by coronavirus

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