12 March 2020

NatWest and RBS offer payment holidays to borrowers affected by coronavirus

NatWest and Royal Bank of Scotland mortgage customers affected by coronavirus could defer their mortgage payments for up to three months if they are struggling to pay. The lenders announced this week that they were prepared to be flexible for those affected by coronavirus, with other lenders expected to follow suit and offer similar support to struggling borrowers.

Even if your lender hasn’t officially said it will offer payment holidays, lenders tend to be reasonably sympathetic to any illness that affects a borrower’s ability to pay their mortgage, whether it’s coronavirus or something else. They may ask for evidence that you are unwell but the message to borrowers, particularly the self-employed who are most likely to be affected in terms of their income, is that anytime you are struggling to pay your mortgage, get in touch with your lender. Don’t bury your head in the sand and hope the problem will go away – it won’t.

If you find yourself struggling, make a proposal to your lender – you might not be able to afford to pay all your mortgage, for example, but you could offer to pay half. The important thing is to ask for help as early as possible rather than ignoring the issue. While lenders should offer support to borrowers, they can only do that if they know there is a problem.

Keep a note of any conversations or correspondence you have with the lender about a payment holiday, as if is not marked down correctly and is noted as arrears, there could be an issue when you come to remortgage in two or three years’ time. But if it is marked correctly, it shouldn’t harm your credit rating.

Lenders aren’t under any obligation to give you a payment holiday and if you are a habitual late payer of your mortgage, they are less likely to be supportive. However, even if you are in this situation you should talk to your lender and see what can be done.