Don’t let money worries dampen your festive spirit

December is a festive time, with a lot of eating, drinking and often, spending. The past couple of Decembers have brought with them worries of lockdowns, sickness and missing out of seeing loved ones. This year, while we can safely see our families and friends, the holiday period brings other worries driven by increases in the cost of living, energy and what the winter might bring.

Mortgage lenders are ready to help any customers concerned about making their mortgage payments, whether you’re worried about your current bills or you’re coming to the end of your fixed-rate mortgage deal and expecting higher costs than before.

Lenders have set up a range of ways that you can contact them or seek help, via websites, webchat and phone lines. You may have even seen a banner or button on your mobile banking app. If you’re worried, don’t wait to contact your lender, the earlier you do so, the sooner they will be able to help.

But what can they do to help? Lenders want to make this as easy as possible. You will need some details to identify yourself and your account. They may also ask you some questions about your income and outgoings to understand your financial circumstances.

Where you require help in making repayments to your lender, they can offer you what is called ‘tailored support’. This means it will be focused on your individual circumstances and what you can afford to pay. For example, you could be temporarily switched to interest-only payments, offered a payment deferral, or something else. You will never be asked to pay more than you can afford. Lenders will make sure to agree a form of support with you before it is applied to your account so that you understand what this means for your mortgage and your payments, including how any arrangement will be reflected on your credit file.

We know that people get worried that if they say they might be in trouble, they might lose their house. Possession is always a last resort when all other ways to help have been exhausted.

Lenders know that borrowers might want more comfort during this period. So as a reminder, lenders will typically pause possession activities from close of business 16 December 2022 and recommence on the first working day in 2023. This means that no homes will be repossessed in this time.

We are also pleased to see that the government has heard our call for more help. If you are in receipt of, or qualify for, Universal Credit (or other income benefits), you can apply for a Support for Mortgage Interest (SMI) loan. This means that a lender can switch your mortgage to interest-only and SMI will cover the interest payment. In the Autumn Statement, the government confirmed that the wait time for eligibility will be reduced from 39 weeks to 13 weeks. The zero earnings rule will also be removed, meaning that those with some income will not be penalised.