• 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 interest longer term. If you've been financially impacted by COVID-19 and this is impacting your ability to meet your monthly mortgage payment, then you can request a repayment holiday to defer some or all of your monthly mortgage payments for up to three months. If you have already taken a repayment holiday for three months, you can request a further repayment holiday for up to three months (maximum of six months in total). This is available to all customers including those in arrears.

    The deadline for applications is 31 October 2020 and all payment deferrals must finish by end of January 2021. If you continue to be impacted by COVID-19 and have already taken a payment deferral for six months or the deadline for applications has passed, 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. 

    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 arears 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.

    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, if you would prefer to speak to one of our Advisers, you can 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.

    How will taking a Repayment Holiday impact my mortgage?

    It's important to know that by taking this 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. At the end of your payment holiday you have the option to agree an alternative arrangement for repaying the accrued interest and deferred payments, this could be by making a lump sum payment, through an overpayment arrangement, or by applying for an extension to your mortgage term (subject to eligibility).

    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. Specifically, it helps you see an estimate of the increased monthly mortgage payments you’ll need to make in future once your mortgage repayment holiday is over. 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:

    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 June-August 2020

       Repayment  Repayment  Interest Only
    Balance at start of repayment holiday   £100,000  £100,000  £100,000
    Interest Rate  2.50%  2.50%  2.50%
    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
    Monthly Increase £27.32 £8.53 £1.31
    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.

    We’ll write to you at the end of your repayment holiday, approximately 2 weeks before your payments are due to restart, to confirm your new monthly payment. If you’re still worried about your financial situation when you receive this letter, please contact us on 0345 835 3374 (open 8a.m - 7.30p.m weekdays and 8a.m - 12.30p.m Saturday).

    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 have been financially impacted by COVID-19 and would like to take a repayment holiday up to a maximum of three months or apply for a further repayment holiday up to a maximum of three months (maximum of six months in total), please complete the online application form. If you would prefer to speak to someone please contact us on 0345 835 3380. We're here from 8.30am - 7.00pm Monday to Friday (except bank holidays).

      Your repayment holiday will be agreed in writing subject to approval.

      If you would like to request a Repayment Holiday, complete the:

      Mortgage Repayment Holiday Request Form

      IMPORTANT – Your Direct Debit Payment Date

      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 1st July, you would need to submit your request by 17th June otherwise your normal monthly repayment will be collected on the 1st July and your repayment holiday will commence from 1st August.

      Read our privacy policy for information on how your data is used.

      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. If you still require assistance with your mortgage once the repayment holiday ends, please contact us on 0345 835 3374 (open 8am - 7.30pm weekdays and 8am - 12.30pm Saturday).


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