Repayment Holidays– Coronavirus (COVID-19) impacted customers
If you can maintain your mortgage payments, you should continue to do so as this will be in your best interests longer term. If you've been financially impacted by COVID-19 and this is affecting your ability to meet your monthly mortgage payment, then you can request a repayment holiday. You can defer some or all of your monthly mortgage payments, up to six months in total, in periods of up to three months at a time. The application deadline is 31 March 2021 and all repayment holidays must end by 31 July 2021. After 31 March 2021, you can extend an existing repayment holiday until the 31 July 2021 as long as your request doesn’t go over the six month limit and there are no breaks in the repayment holiday.
If you’ve already taken six months repayment holiday and are continuing to experience financial difficulty, we’re still here to help. Please complete an income and expenditure form and we’ll get back to you within five working days. Alternatively, please call us on 0345 835 3374. We’re here from 8am – 7.30pm Monday to Friday (except bank holidays) and 8am – 12.30pm on Saturdays. Please be aware that our phone lines are busier than usual, and you might have a longer wait.
You don’t need to make any payments during your repayment holiday, but we would encourage you to make some payments towards your mortgage if you are able to do so. This will not impact your repayment holiday request. * If your account is in arrears, any payments you make towards your mortgage during your repayment holiday will reduce your arrears balance first before reducing your deferred monthly payment(s) and interest charged.
If you are worried about money or debts, setting yourself a realistic budget may help. Make a list of your debts and work out which ones are highest priority and which are less important. For most people, it makes sense to pay essential expenses and priority debts before any discretionary expenses or non-priority debts.
- Visit the Money Advice Service website for help with prioritising debts or to read their repayment holidays guide. In addition, Money Advice have an online budget calculator to help you understand your finances.
How will taking a Repayment Holiday impact my mortgage?
It's important to know that by taking a repayment holiday, the amount you owe will increase as you'll still be charged interest. If any part of your mortgage is on a repayment basis, the monthly payment will be recalculated to include an extra amount at the end of your repayment holiday. You'll then need to pay off the amounts that are currently stopped plus the interest that's accrued over the remaining term of your mortgage. The term of your mortgage will not be automatically extended.
With an interest-only mortgage, or any interest-only part of your mortgage, your monthly payment only covers the interest you owe us. When you’re not making your full monthly payments, the interest will be added to your overall balance, meaning it will go up. At the end of the repayment holiday, you’ll have more interest to pay each month because of your higher balance. This will still only cover the interest and not your full mortgage balance.
It’s a good idea to regularly check that any savings or investment plans you may have are on track to give you the money you’ll need.
To help you to understand the impact that deferring payments will have on your mortgage payments and balance, Money Advice Service has provided an impact calculator which can be found here.
Please remember that by taking a partial repayment holiday, the overall impact is proportionally less. You’ll be able to find some important information about your mortgage to help you complete the online calculator in your ‘Repayment holiday is coming to an end’ letter if you have already had a repayment holiday due to COVID-19, or in your last annual mortgage statement.
We have also included an illustrative Example:
The amount your monthly payment will increase by after the repayment holiday, is driven by your balance, the interest rate on your mortgage, remaining term, whether your mortgage is on a repayment basis, interest-only basis or a combination of both, and how long you choose to take a repayment holiday for.
Based on a three month repayment holiday for a capital and interest repayment mortgage November 2020 - January 2021
|Balance at start of repayment holiday||Repayment
|Term Remaining at start of repayment holiday (years)||10||20||Any|
|Current monthly payment||£942.70||£529.90||£208.33|
|New Monthly Payment||£970.02||£538.43||£209.64|
|Interest accrued over the repayment holiday||£626.30||£626.30||£626.30|
This illustrative example has been calculated using a daily interest calculation.
It is important to note that if you are in arrears, the amount of arrears on your account will not increase during this repayment holiday period and we will contact you before your repayment holiday ends to discuss the best method of repaying your arrears.
How will taking a Repayment Holiday impact my credit record?
We do not report any payments deferred by your repayment holiday to the credit reference agencies as being missed payments. If your account is up to date, it will continue to be reported as being up to date with payments for the duration of your repayment holiday. If your account is currently in arrears please note that the existing arrears will continue to be reported but will not reflect any deterioration due to the payment holiday. The balance reported will increase in line with the accrued interest. Other factors including any existing arrears may affect your credit file or your ability to obtain credit.
Find out more information on the FCA (Financial Conduct Authority's) website: payment holidays for customers impacted by COVID-19.
How to Apply
If you've been financially impacted by COVID-19 and this is affecting your ability to meet your monthly mortgage payment, then you can request a repayment holiday. You can defer some or all of your monthly mortgage payments, up to six months in total, in periods of up to three months at a time. The application deadline is 31 March 2021 and all repayment holidays must end by 31 July 2021. After 31 March 2021, you can extend an existing repayment holiday until the 31 July 2021 as long as your request doesn’t go over the six month limit and there are no breaks in the repayment holiday. Please complete the online application form. Alternatively call us on 0345 835 3380. We're here from 8.30am - 7.00pm Monday to Friday (except bank holidays). Please be aware that our phone lines are busier than usual, and you might have a longer wait.
Your repayment holiday will be agreed in writing subject to approval.
If you would like to request a Repayment Holiday, please complete this form:
IMPORTANT – Your Direct Debit Payment Date
Please note – if your next Direct Debit is due to be taken within 10 working days, we will process your repayment holiday request for the following month. For example, if your Direct Debit is due on the 1st February, you would need to submit your request by 18th January otherwise your normal monthly payment will be collected on the 1st February and your repayment holiday would commence from 1st March. The month your repayment holiday starts will be listed in your confirmation letter or email. If you have any questions you can call us on 0345 835 3380. We’re here from 8.30am – 7.00pm Monday to Friday (except bank holidays). Please be aware that our phone lines are busier than usual, and you might have a longer wait.
At the end of your repayment holiday
At least two weeks before your repayment holiday ends, we'll contact you to let you know what happens next and explain the changes to your mortgage payments. We'll also let you know about the different ways of repaying the deferred monthly payment(s) and interest accrued, along with information on extra financial help if you need it. At the end of your repayment holiday, if you’re still worried about your financial situation please contact us on 0345 835 3374. We’re here from 8am – 7.30pm Monday to Friday (except bank holidays) and 8am – 12.30pm on Saturdays. Please be aware that our phone lines are busier than usual, and you might have a longer wait.
Please note if you make any changes to your mortgage during your repayment holiday, for example a change to the term or product, you’ll receive new offer documentation. The figures on those documents, including monthly payment and total amount payable, will not include the recalculation completed at the end of your repayment holiday. You will receive written confirmation of your new monthly payment at the end of your repayment holiday.