MPs ask lenders to up payment holiday offers

Lenders are facing calls from MPs to up their mortgage holiday offers so they also freeze interest that businesses repay during the coronavirus pandemic. Business relief should be granted for up to six months for interest payments, MPs have told the FCA, Law360 reports. The All-Party Parliamentary Group on Fair Business Banking noted that offering holidays just on the capital element of mortgage repayments might not be enough to save some businesses.

"Lenders should step up support and proactively offer full payment holidays, i.e. interest as well as capital, to impacted business customers," the group said yesterday. "Taking a full mortgage holiday is not a cheap solution as interest will still accrue on the loan. However, for businesses which have been ineligible for the other types of government assistance or for whom it was insufficient, it is an option which could make all the difference." The group notes that interest normally makes up the majority of the loans, and lenders are not being proactive in offering deals to their business customers.

Business can apply for breaks of up to six months under current rules, and have until October to do so.

Between schemes designed to freeze credit card payments and mortgage holidays, lenders have agreed more than 3.3 million relief measures, figures suggest.

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