A Midlands property lawyer has cautioned landlords that taking a mortgage holiday will affect them long-term, because their loan will take longer to pay off.
Currently landlords are able to apply for a three-month mortgage payment holiday due to the coronavirus crisis.
Javed Ahmed, an associate at law firm mfg Solicitors, said: “Effectively, the payment holiday introduced by the government in recent weeks means mortgage payments are put on pause for a set period, currently three months.
“The offer is available to homeowners who had been up to date with payments before the crisis. Landlords can also claim however, they are expected to pass the savings onto their tenants who are struggling to make rental payments”
“The mortgage holiday is one of many measures by the government to help people through the crisis and quite rightly it is a welcome move. However, there are many people not reading or aware of the small print.
“The main downside of taking a mortgage holiday is that interest is still payable and it will build up over those three months, meaning you will owe more on the mortgage and it will take people that bit longer to pay it off.
“It is an option many people are taking and is clearly better to take a little longer to pay off the mortgage than risk losing your home altogether. I just want people to be aware of the full picture.”
The holiday period is available to people who have lost work and salary as a result of the government-imposed lockdown.
Ahmed highlighted that landlords don’t have to have the virus to apply for the holiday.