Mortgage breaks taken by 1.6 million homeowners could cost them at least £821 million in extra interest according to new analysis.
Research by mortgage broker L&C Mortgages has shown that the mortgage breaks taken by 1.6 million homeowners due to the COVID-19 pandemic could cost them at least £821 million in extra interest.
Figures calculated by the broke, based on data from UK Finance, show that a borrower on the typical deal will save £2,256 in repayments by taking a three-month mortgage payment holiday.
However, they will ultimately pay £500 more than they would have done without the break because of the interest accrued on the unpaid sum.
David Hollingworth at L&C said: “It can’t be stressed enough that the payment holiday could be a lifeline for those whose income has been hit the hardest, but hopefully this helps to give some context that there is a cost attached.”
Separately it has been reported that Chancellor, Rishi Sunak, is believed to be discussing ways of extending three month mortgage holidays with regulators and banks.