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Banks will make £600m in extra interest from Covid mortgage holidays 

by Nadia Hildebrand (2020-05-19)


australian-beach-footprints.jpg?width=74Banks are set to make more than £600 million in extra interest paid by cash-strapped homeowners taking mortgage holidays, Money Mail can reveal.

Campaigners say the vast profit lenders will make from the crisis is 'disgraceful' and are demanding they scrap additional interest charges.

The breaks are seen as a lifeline for borrowers facing financial ruin due to the coronavirus crisis and 1.24 million have been approved, according to UK Finance. But most homeowners will end up facing heftier interest payments as a result — around £500 on a typical mortgage.






Holiday rush: Campaigners say the vast profit lenders will make from the coronavirus crisis is 'disgraceful' and are demanding they scrap additional interest charges


That is despite banks being able to borrow at record low rates and the billions of taxpayer cash that was used to bail them out in the last financial crisis.

Baroness Altmann, former pensions minister, says: 'It's an outrage that people are being led to believe that banks are somehow being kind to them when actually what they're doing is making more money from them. What we need is an interest holiday that doesn't rack up extra costs in the long run and actually gives something back.'

Homeowners can ask their bank to freeze their mortgage payments for three months, but face paying out more overall because interest accrues.






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