Mortgage payment holidays
Updated 7:00am on Wednesday 1st July 2020
As a result of coronavirus, we understand you may well be worried about making your mortgage payments. If you are, a mortgage payment holiday could help.
What is a mortgage payment holiday?
A mortgage payment holiday is a temporary break from paying your mortgage which can last between one and three months.
You can take a full or a partial mortgage payment holiday. If you're able to make any mortgage payments during your mortgage payment holiday - a ‘partial mortgage payment' holiday - you should. This will help reduce the overall cost of your mortgage in the long term.
It is important to remember that throughout your mortgage payment holiday, interest will continue to build up at the interest rate on your account.
I’ve yet to apply for a mortgage payment holiday
You can apply for up to three months mortgage payment holiday
I’ve already had a mortgage payment holiday
We have a range of options available to you at the end of your mortgage payment holiday including the option to extend
Applying for a Mortgage Payment Holiday
Who can apply?
Mortgage payment holidays are available to mortgage customers who may be impacted by coronavirus, plus buy-to-let landlords whose tenants are affected.
Am I eligible?
You can apply for a mortgage payment holiday if:
- Your finances have been affected by coronavirus
- You have consent from everyone named on the mortgage
If you're unsure whether a mortgage payment holiday is the right option for you, please call us on (freephone) 0800 072 9739 to discuss your options.
Will a mortgage payment holiday affect the amount I owe?
It's important to remember that throughout your mortgage payment holiday, interest will continue to build up at the interest rate on your account. This means you'll pay an increased amount of interest over the term of your mortgage. When you start making mortgage payments again, they may be higher than you previously paid.
Once your mortgage payment holiday comes to an end, we'll write to let you know your new mortgage payment. This will reflect the interest and payments that built up during your mortgage payment holiday. The example below shows you how this may work.
You have 10 years left on your mortgage with a balance of £100,000, you are on a fixed five year rate of 1.88%, followed by our Standard Variable Rate of 5.29%:
- After taking a three month mortgage payment holiday, your monthly payment would increase from £914.14 to £939.83. The total amount you repay would be £114,773.31, an increase of £400.71 in interest.
For more examples of how a mortgage payment holiday affects how much you owe, take a look at the table below.
|10 Year Term Remaining||20 Year Term Remaining|
|Monthly Payment Before||£914.14||£499.91|
|1 month mortgage||payment holiday|
|New monthly payment||£922.54
|New total repayable balance||£114,505.46
|2 month mortgage||payment holiday|
|New monthly payment||£931.14
|New total repayable balance||£114,638.52
|3 month mortgage||payment holiday|
|New monthly payment||£939.83
|New total repayable balance||£114,773.31
The figures are meant as a guide and may vary due to individual circumstances and mortgage products you may take during the life of your mortgage.
For an example of how your monthly mortgage payments could change, please visit the online calculator at MortgageHoliday.co.uk. This is for your personal use only to help you decide whether a mortgage payment holiday is right for you. To help you do this, you need some information about your mortgage to hand: for example your current monthly payments and the remaining term on your mortgage. You should be able to find everything you need on your annual mortgage statement.
What happens at the end of the mortgage payment holiday?
- We’ll send you a confirmation letter with your new monthly mortgage payment amount and further information.
- Your monthly mortgage payments will start again after the mortgage payment holiday ends.
- Depending on your chosen method of repayment:
- - your monthly payments may be higher than before.
- - the total interest owed on your mortgage may increase.
- We'll include information on how to minimise interest payments in your confirmation letter.
- If you have a capital and interest mortgage, the capital not paid over this period will still need to be repaid. We'll send you more information about this in your confirmation letter.
If you're able to, you can make payments to your mortgage whilst on a mortgage payment holiday. You can find out more about how to make payments using our secure automated payment line or your online banking here.
How do I apply?
- If you pay by Direct Debit and you’re up to date with your mortgage or less than one month in arrears: use our new online form to request a mortgage payment holiday. This is the quickest way of registering your request.
- If you need to speak to someone and you’re up to date with your mortgage payment or less than one month in arrears: call us on (freephone) 0800 072 8738.
- If you’re over one month in arrears: call us on (freephone) 0800 072 9739.
Lines are open Monday to Friday 9am until 5pm, and Saturdays 9am until 2pm.
Important: if you’re able to make any mortgage payments during your mortgage payment holiday - a ‘partial payment’ holiday - you should. This will help reduce the overall cost of your mortgage in the long term. You can find out more about how to make payments using our secure automated payment line or your online banking here.
Answering some more of your questions
Will my mortgage payment holiday have a negative effect on my credit file?
Taking a mortgage payment holiday in these circumstances won't have a negative impact on your credit file. You should bear in mind, however, some lenders may look at information from other sources – such as banks and building societies – when making a lending decision.
If I don’t live at the mortgaged property, how will I get a confirmation letter?
That's not a problem. You can find all the information that's included with your confirmation letter here(opens in a new tab).
When will my mortgage payment holiday start?
Where possible we will start your mortgage payment holiday from your next monthly payment. However, if your next payment is due in the next few days, your mortgage payment holiday may start the following month.