You are here: Home - News -

Borrowers used mortgage payment holiday to build reserve fund – Experian

  • 14/10/2020
  • 0
Borrowers used mortgage payment holiday to build reserve fund – Experian
Half of borrowers who deferred their mortgage payments as part of the government’s coronavirus support measures have not suffered any decline in their spare income, according to research from Experian.


A further quarter of households on a payment holiday have seen their disposable income increase, choosing to take the payment holiday to build up a reserve fund in case their future earnings decline.

Currently, around 1.9 million mortgage accounts are in the payment deferment scheme. The average balance of a borrower who has taken a payment holiday is £150,000, 30 per cent higher than the £114,000 average balance of a borrower who has not used the scheme.

Mortgage applications increased year-on-year by 13 per cent in July, followed by rises of 25 per cent in both August and September and the market is on track to lend £216bn this year, according to the analysis.

Due to the lockdown restrictions, lending is expected to be down on last year’s total of £250bn.

Lisa Fretwell, managing director of data services at Experian, said: “People moving home is good news for the economy, as activity in the property market fuels growth in related services.

“Most moves require a mortgage and, while lenders want to extend new loans, they have a responsibility to ensure homebuyers are only taking on what they can afford in the long-term.

“Covid-19 has complicated the financial situation for millions of people, and the challenge for lenders to understand each applicant’s circumstances has become more difficult as a result.”


Related Posts

There are 0 Comment(s)

You may also be interested in