On its website, Nationwide Building Society said customers would not be able to switch to a new deal while on a holiday and said borrowers who wanted to switch should do so before requesting a break.
Mortgage Solutions has seen evidence of brokers who have been unable to complete cases with Halifax borrowers who were on a mortgage holiday.
Additionally, David Conway, director of Clayhall Financial Services, told Mortgage Solutions that a BDM for the bank said it does not permit borrowers to take out a new mortgage deal while on a payment break.
He was also told that Halifax would not allow borrowers to have another break if they have had one for Covid-19 in the last two months.
This will only apply to payment holidays further on as the bank has only recently adjusted its policy for such allowances, he added.
Barclays borrowers will also not be able to transfer onto a new deal because a borrower’s direct debit is blocked during a mortgage payment holiday, it is understood.
On the other hand, Coventry Building Society and Leeds Building Society are allowing borrowers to switch onto new deals while within a payment break.
Accord also said holidays would not be affected by any product transfers which were already applied for.
Other lenders have not yet updated systems to enable this but are allowing product transfers during holidays for the moment.
NatWest said it was waiting for clarity on how this should work but said borrowers should “proceed as normal”.
HSBC said it was working on developing a facility to allow customers to take payment holidays.
Conway said: “Some borrowers are seeing it as free money without realising it could end up costing them even more in the long run if they end up on the lender’s standard variable rate because their deal ended during the holiday.
“The government were right to bring in these measures, but there was no thought behind the logistics of how it would work.”
Mortgage Solutions has contacted lenders for comment.