Mortgage and Protection — Coronavirus Update
Qandor member and director of OnPoint Mortgages, Lee Langley updates us on the latest changes caused by the coronavirus crises.
With the landscape changing daily we cover some of the biggest events to affect the mortgage industry.
Interest Rate Cut
On the 19th of March the Bank of England announced a further emergency cut in interest rates from 0.25% to 0.1%, taking borrowing costs back down to the lowest level in history. Most of the big banks, such as Halifax, Santander, HSBC and Barclays will have passed on the full initial 0.5% cut to customers on their variable and tracker products from the 1st of April. So far, however, we have seen little movement in fixed rate pricing, with the biggest shake up coming from Foundation Home Loans who halved some of their fees.
Mortgage Payment Holidays
On the 17th of March the Chancellor Rishi Sunak announced a raft of measures including a three-month mortgage payment holiday for those financially affected by the virus, designed to protect homeowners. The mortgage payment is deferred, the monthly payment set to zero and interest accrues for the period. Thankfully lenders will be speaking to credit reference agencies to ensure that customers utilising this option will be treated consistently on their report. For those wishing to pursue this option, you would need to contact your lender directly. Typically, lenders would need to assess the borrower’s finances, but this is being waived, allowing mortgage providers to implement a more straightforward process.
Protection Insurances
We are experiencing increasing numbers of clients enquiring about their options around protection. These insurances have been historically undersold but can be invaluable and include life, critical illness and income protection. In addition, landlords are keen to explore rental protection insurance. Cover can be bought for 6 to 12 months depending on the length of your AST and the full cost is tax deductible against your rental income. It is important to seek professional advice to ensure any policy will be suitable for your needs.
Lee Langley is the Principal Mortgage and Protection Adviser at OnPoint Mortgages. OnPoint Mortgages is a trading style of L&D Mortgages Limited is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority.
Your home may be repossessed if you do not keep up repayments on your mortgage. Some forms of Buy to Let and Commercial Lending advice are not regulated by the Financial Conduct Authority.
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