Furlough warning: Britons may struggle with mortgage payments – ‘don’t bury head in sand’
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Furlough is set to draw to a close at the end of September, and there are fears there may be a swell in redundancies. Indeed, as Government support begins to wane in the coming months, some companies are already reckoning with the idea of laying off staff. Nobody knows the impact redundancies will have across the country, but losing one’s job can have major ramifications.
One of these is mortgage payments, perhaps the biggest financial responsibility anyone will take on.
Defaulting on a mortgage can have serious consequences which many people will be hopeful to avoid.
With this in mind, Express.co.uk spoke exclusively to John Penberthy-Smith, Chief Commercial Officer at Saffron Building Society.
Mr Penberthy-Smith provided further insight into the help available for Britons in this bind.
He said: “With the wind-down of furlough support already in progress, and the fear of potential redundancies looming for some workers, we are aware that many are looking for some guidance if they are concerned about paying for their mortgage.
“It is common, especially with us Brits, to bury our heads in the sand in embarrassment.
“But there are Government benefits and financial support available, and it is vital that everyone asks for, and gets, all the help they deserve.”
It is worth noting that benefits may not totally cover a person’s mortgage repayments.
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However, the extra cash could prove a lifeline to help families who are impacted by this change.
Payments may provide a bridge for Britons between jobs, while a person searches for a new job.
Mr Penberthy-Smith stressed that asking for support is a sign of “strength, not weakness” and that individuals should not be afraid to look into the matter.
He continued: “The UK Government has the scheme to support those who fall into difficulties called the Support for Mortgage Interest scheme (SMI).
“It is not a guaranteed solution, as there is an application process, but the government will cover your mortgage interest with a loan up to the value of £200,000.
“SMI should be considered a temporary solution, as with any loan, it is subject to interest – currently 2.08 percent – and will need to be repaid on the sale or transfer of ownership of the property.
“The loan is paid directly to the lender. To date, we have not seen an increase in members taking the loans.”
To be eligible for a Support for Mortgage Interest loan, a person usually needs to be in receipt of one of the following benefits:
- Universal Credit
- Pension Credit
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
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Britons can apply through contacting the office which pays their benefit to see if they are eligible.
However, Mr Penberthy-Smith highlighted an option which he considers to be the “best recommendation”.
He advised Britons to always speak openly and honestly about their financial situation to avoid chaos and confusion.
He concluded: “It’s more than money; it is your mental and physical health that can be affected in these situations.
“A responsible lender will do all they can to support you.
“They will give you personalised guidance at what we understand is a challenging time.”
Those who feel like they could be in a worsening situation are encouraged to speak to debt charities such as StepChange or National Debtline.
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