Lenders have agreed to offer their customers on mortgage holidays a new deal, so they do not end up paying a costly standard variable rate (SVR).

But in some circumstances, borrowers could be better off revoking the mortgage holiday and remortgaging instead, AMI said.

The trade body is concerned borrowers on payment holidays may think a product transfer is their only option so urged people to seek advice from a mortgage broker.

Robert Sinclair, chief executive of AMI (pictured), said: “While this support for consumers is positive and avoids the consumer falling onto a lender’s SVR, it is inward-looking as it makes no consideration as to whether the deals offered are appropriate.

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“Some customers may find that if they revoke their mortgage payment holiday and re-mortgage, it could result in a more suitable outcome. They also may not be aware of how a specific deal compares to others in the marketplace.

“As a result of Covid-19 many more consumers may be vulnerable, so it is vitally important that they explore their options.

“While a product transfer may seem the most straightforward option, consumers should talk to a mortgage broker as they are well placed to assess individual circumstances.”