Important information regarding mortgage payment holidays
The Government’s mortgage payment holiday scheme has now drawn to a close.
If you already have a mortgage payment holiday in place with us, this will remain in place as per our agreement with you. Should you need to, you are entitled to request an extension to your existing mortgage payment holiday to 6 months in total, or until 31 July 2021, whichever date falls earliest.
If you require additional financial support and you have already had a payment holiday on your mortgage totaling 6 months, and would like to know more about the options available to you, please see the section titled ‘What additional support is available?’ at the bottom of this page.
What happens now my existing mortgage payment holiday is coming to an end?
Before your mortgage payment holiday comes to an end we will contact you to explain the next steps, your options and how we can provide help and support going forward, should you need it.
If we are unable to contact you prior to your mortgage payment holiday expiry date, we will resume the payment schedule in line with the repayment preference that you stated when you applied for the payment holiday.
Whilst during your payment holiday you did not need to make any mortgage payments, the interest will have continued to be added to the mortgage so the total amount you will need to repay by the end of your mortgage term will increase.
When the payment holiday comes to an end, we will work with you to determine a way forward with you to continue your monthly repayments for the rest of the mortgage term. Your mortgage payments may be higher than they were before the holiday.
Please do not cancel your Direct Debit. Keeping it in place makes restarting payments much easier after your payment holiday.
When your payment holiday ends, there will be a choice as to how to repay the funds. We will confirm what these will be before the end of the holiday period.
- A full repayment of the deferred amount (i.e. your monthly mortgage payments, including interest, over the holiday period).
By paying the deferred amount as a lump sum, this will mean that after the holiday period your monthly payments and mortgage term will remain the same and you will not incur any additional interest.
- An increase in your monthly mortgage payments over an agreed period.
This will allow you time to repay the deferred amount over a period which is comfortable for you. With this option you will incur additional interest, and this will vary dependent on the period over which you choose to increase your payments. However, this will allow you to repay your mortgage within the existing agreed term.
- An extension to the term of your mortgage.
With this option you are adding the deferred amount to your mortgage balance and extending the term by the same period as your payment holiday. This will mean that your monthly payments can remain broadly the same, however with this option you will incur more interest over the term of the mortgage.
Mortgage payments following a payment holiday
When your payments start again after the payment holiday they will be recalculated, and you may see an increase in your regular payments.
Interest will continue to build at your usual interest rate during the payment holiday and the total amount of interest you pay over the term of the loan will increase. Example:
|Mortgage holiday interest example|
|Remaining mortgage term||20 years||30 years|
|Repayment type||Capital & interest||Capital & interest|
|Monthly payment before payment holiday||£1,546||£2,278|
|Monthly payment after payment holiday||£1,570||£2,304|
|Increase to your monthly payments||
|Current remaining total cost of mortgage||£371,095||£820,154|
|Remaining total cost after payment holiday||£372,187||£822,648|
Are you worried about your mortgage repayments?
If you need support regarding your mortgage or any further questions around your mortgage payment holiday, please contact us or your Relationship Manager, and we will be happy to discuss this with you.
What additional support is available?
We want to assure you we are putting more support in place and will provide you with repayment options going forward. We will contact you when your mortgage payment holiday ends, so you don’t need to call us, but we are here to help if you have any questions.
Whilst the payment holiday scheme has now ended, we may be able to set up a new payment arrangement with you, if you are still experiencing financial difficulty.
It is important to understand that any further financial assistance that you require could be reported to credit reference agencies, which might impact your credit rating, making it harder to get credit in the future. Further financial assistance may also increase your mortgage balance and how much you have to repay in the future.
If you are experiencing financial difficulty and would like to speak to us about your circumstances, please click here.
We will do our best to respond to your enquiry within three working days. However, due to high volumes of queries, it may take slightly longer. We understand that many of you will want to talk to us during these uncertain times and we would like to thank you for your patience.
Further help and support
The organisations below can also give you free debt advice and support:
Think carefully before securing other debts against your home. Your mortgage is secured on your home, which you could lose if you do not keep up your mortgage repayments.