Here’s a list of frequently asked questions…
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Flexible Features
If you need a short break from making your payments, you may be able to take a payment holiday. A payment holiday allows you to stop making your monthly payments for up to three months.
Things you should consider before taking a payment holiday
- We’ll continue to charge interest whilst your payment holiday is in place. This means the amount you owe will increase and you’ll pay more interest overall.
- When your payment holiday ends, we’ll recalculate your monthly payment. It may increase as a result. We’ll write to you to let you know what your new payment will be.
- If your mortgage is on interest only, the amount you will need to pay back by the end of your mortgage term will increase. You should check that your plans are on track to pay back this amount. If you don’t have a plan or you’re worried that it might not be enough, we can help. Call our dedicated team now on 0330 159 7153. Phone lines are open Monday to Friday 08:30am-6:00pm.
- If your financial situation changes, you can still make payments whilst your payment holiday is in place. This means you’ll pay less interest over the term of the mortgage.
Mr & Mrs A have a repayment mortgage…
- There’s 10 years remaining on the term.
- They currently owe £80,000.
- Their monthly payment is £1,030.
After a three-month payment holiday…
- The amount they owe will have increased by over £1,866 because they haven’t paid the interest due.
- Their monthly payment will go up by over £40 a month. This is because we would recalculate their mortgage payment to make sure they’ll repay their balance by the end of the term.
- They’ll pay more interest over the term of their mortgage unless they make overpayments in the future.
If their mortgage was on interest only, their monthly payment would have gone up by over £14 a month. But the amount they would need to pay back at the end of the term would have increased by over £1,895. They’ll also pay more interest over the term of their mortgage.
Check if you’re eligible
You may be able to apply for a payment holiday if:
- You’ve made your full mortgage payment on time for the last nine months or you’ve previously overpaid by more than the amount of the payments you want to miss.
- You’re up to date with your mortgage payments.
- You can afford the increase to your mortgage payment after the payment holiday ends.
- You’re not (and haven’t previously been) bankrupt or in an Individual Voluntary Arrangement (IVA).
- You’re not in a Debt Management Plan (DMP).
- You don’t receive support from the Department for Work and Pensions (DWP).
- You’re not in breach of your mortgage terms & conditions (for example, you can’t be letting the property without our permission).
- All parties to the mortgage agree to the payment holiday (where there is more than one person named on the mortgage).
- Call us on 0330 159 7152.
Phone lines are open between 8:30am and 6:00pm Monday to Friday.
When you speak to us, we will:
- Ask you when you want your payment holiday to start. This must be the first day of a month, so we recommend contacting us at least 10 days before this, to allow us enough time to process your application.
- Carry out an affordability assessment to make sure that the increased payments are affordable. It will be helpful to have information like payslips, bank statements and how much you spend on your household bills ready when you call. If you’re unable to provide us with this information, it may delay the application process.
- Use information from credit reference agencies. If you have any missed or late payments on other credit commitments, defaults or County Court Judgments (CCJs), this may affect our decision.
- If we can’t offer you a payment holiday and you’re going to struggle to make your mortgage payment, we’re here to help. You can reach our customer assistance team and speak to one of our experienced agents by calling 0330 159 7152. Their phone lines are open Monday to Friday 8:30am – 6:00pm. Or, if you’d prefer you can send us a secure message using our self-serve facility.
Ways we can help
We can change your payment due date to be earlier or later (for example, to match the date you get paid), as long as the new date is within the same month.
Important information about changing your payment due date:
- If your new payment due date is later in the month, you’ll pay more interest as a result. This is because the amount you owe will be higher for longer.
- If you choose a payment date at the end of the month, you must make sure that we receive your payment in time to apply it to your account. This is important if you pay by bank transfer or online. You can visit the Making your payment section of our Manage Account page for more information on this.
You could convert all or part of your mortgage to repayment over your remaining term or (depending on your circumstances) a longer term. This means you would pay back both capital and the interest at the same time. This would increase your monthly payments, so you’d need to speak to one of our qualified mortgage advisors to make sure that it’s affordable. You can make an appointment by calling us on 0330 159 7152. Phone lines are open Monday to Friday 8:00am – 8:00pm.
Important things to consider:
- The shorter the term remaining on your mortgage, the higher your monthly payment. You need to make sure you’ll be able to keep up the higher monthly payments.
- How much you can extend your term by will depend on factors such as your income, age and your chosen retirement date.
- Spreading your payments over a longer term will result in you paying more interest.
- On a repayment mortgage, as long as you make all your monthly payments, your mortgage will be paid off in full at the end of the term.
An overpayment is an extra amount you choose to pay on top of your normal monthly payment. Overpaying means you can save money on the interest you pay by reducing the outstanding mortgage balance. It can also help reduce the amount you need to pay back at the end of the term. We don’t charge any early repayment charges, so there’s no limit to the amount you can overpay by. You can find out more about making overpayments and how to do this here.
Important things to consider:
- You should only overpay if you can afford to do so. If you’re unsure whether overpaying is right for you, you may wish to seek independent financial advice to help you with your decision.
- Overpaying might not pay back the full amount you owe by the end of the term. We recommend that you review your repayment plans at least once a year.
If you have an endowment policy, shares, Individual Savings Account (ISA) or other investment plan that you were saving for a rainy day, you might want to consider using this to reduce or pay off your mortgage.
Important things to consider:
- The value of savings and investments can go down as well as up so it’s important to check on the progress of your plan regularly to make sure that it’s on track.
- If you’re unsure whether using an investment policy to repay all or part of your mortgage is right for you, you may wish to seek independent financial advice to help you with your decision.
- If your savings or investment aren’t enough to pay back the full amount you owe by the end of the term, you’ll need to think about how you’ll pay back any remaining balance.
You might be able to get a cheaper mortgage with a new lender which could help make paying back your interest only mortgage more affordable. If you haven’t missed any payments in the last year, your account is up to date and you don’t need to borrow more money, you may be able to switch right now. To find out more information, click here.
If you plan to sell your property to pay off your interest only mortgage, you’ll need to think about where you’re going to live.
You may wish to:
- Use the equity from your property to buy a cheaper property with no mortgage.
- Move into a rented property or with family.
You’ll need to make sure that you have enough equity in your property to make your plan work.
Important things to consider:
- How much is your property worth and how much money will be left over after you’ve repaid your mortgage?
- How much would a cheaper property cost? Can you afford the difference?
- If you would need to maintain a smaller mortgage, how much could you afford to pay each month? And for how long?
If you’re planning to sell your property, our dedicated team can help you answer these questions. Call our team on 0330 159 7153. Phone lines are open Monday to Friday 08:30am-6:00pm.
If you’re unable to meet all or part of your mortgage payment, we might be able to accept a lower or even no payment for a period of time.
Important information about making lower payments:
- We normally agree for you to pay less than your monthly payment to cover a temporary change in your circumstances, like being out of work or undergoing medical treatment. It isn’t a long-term solution.
- Paying less than your monthly payment may result in your account going into arrears. Once your finances are back on track, we’ll work with you to agree an affordable arrangement to pay the arrears back.
- Each month, we’ll tell credit reference agencies about any arrears on your account. This may make it more difficult or expensive for you to borrow money in the future. You can find more information about how credit file reporting works here.
- If your mortgage is in arrears, you’ll be charged more interest. This is because your mortgage balance will be higher than expected. The additional interest will increase the amount you owe and reduce the amount of equity you have in your property.
- Paying less than your monthly payment may affect your eligibility to use your flexible features (if you have them). You can find out more about the criteria here.
Once your finances are back on track, we may be able to agree an overpayment arrangement to help you repay any outstanding arrears. The amount we agree will be based on your individual circumstances and how much you can afford to pay.
Important information about overpayment arrangements:
- Your overpayment arrangement will typically need to pay back any outstanding arrears by the end of your mortgage term.
- Each month, we’ll tell credit reference agencies about any arrears on your account. This may make it more difficult or expensive for you to borrow money in the future. You can find more information about how credit file reporting works here.
- If your mortgage is in arrears, you’ll be charged more interest. This is because your mortgage balance will be higher than expected. The additional interest will increase the amount you owe and may reduce the equity you have in your property.
We may be able to extend your mortgage term if you have a repayment mortgage and need longer than the existing term to pay back the balance or outstanding arrears.
Important information about extending your mortgage term:
- Paying back your mortgage over a longer term means you’ll pay less each month. However, because you’ll be paying off your mortgage for longer, you’ll pay more interest and so end up paying more overall.
- How much you can extend your term by will depend on factors such as your income, age and your chosen retirement date.
- You need to consider whether you can afford to pay the mortgage over a longer period, particularly if this goes past your retirement.
If you have a repayment mortgage and need either a reduced payment for a period of time or want to repay your arrears faster, you may be able to temporarily switch to making interest only payments.
Important information about switching your repayment type:
- We normally agree a temporary switch of repayment type to cover a short-term change in your circumstances, like being out of work or undergoing medical treatment. It isn’t a long-term solution.
- When you switch back to your original payment method, your payments will increase. You need to be confident that you can meet these higher payments.
- Your monthly payment will only cover the interest and won’t reduce the balance owed. This means you’ll pay more interest over the remaining mortgage term.
- If you have any arrears on your mortgage, we’ll continue to tell credit reference agencies about these. If you temporarily switch your repayment method, this may impact the information we provide to credit reference agencies. We’ve included an example below to show how this may affect you.
Mr & Mrs A have a repayment mortgage…
- Their monthly payment is £250
- They have arrears outstanding of £250
- We’d report to credit reference agencies that their account is one month in arrears
If Mr & Mrs A reduced their monthly payment to £50 following a temporary switch to interest only…
- Their arrears would remain at £250
- We’d report to credit reference agencies that their account is five months in arrears
If you’re no longer able to afford to live in the property but have somewhere else to live that is affordable, we may agree for you to let the property for a temporary period.
Important information about letting your property
- You’ll need our permission to let your property. This is known as “consent to let”.
- We’ll agree for you to let the property for a maximum of 12 months. If you wish to do this for longer, you’ll need to reapply every 12 months.
- We charge an annual fee of £31.00 to cover the administration costs of us assessing and agreeing your application. You can either pay this fee up front or add it to your mortgage balance. If you add it to your mortgage balance, you will incur additional interest.
- You’ll be responsible for meeting any costs and legal requirements associated with letting your property, for example paying tax on any profit you make from renting out your property, gas safety checks, letting agents etc. You may wish to seek independent financial advice for more information on this.
If you’ve got your finances back on track and you’d like to add your outstanding arrears to your mortgage balance, capitalising your arrears may be an option. We usually need you to maintain your monthly payments for at least 6 months before we will consider capitalising your arrears.
Important information about capitalisation:
- Your monthly payments will increase as a result of adding your arrears to your mortgage balance. We’ll need to check that you can afford the increased monthly payments.
- Once we’ve added the arrears to your mortgage balance, we’ll tell credit reference agencies you’re now up to date with your payments. If you miss any future payments, we’ll report these to credit reference agencies.
- We’ll add the outstanding arrears to your account on a repayment basis. This is so that you’ll pay the arrears back by the end of your mortgage term. If you want to only pay the interest, we may consider this but you’ll need to provide us with details of your plan to pay off the balance at the end of the term.
- Paying back your arrears over the term of your mortgage will result in you paying more interest.
If you can no longer afford to make your mortgage payments but want to stay in your property and are resident in Scotland or Wales, you may be eligible for one of their mortgage rescue schemes. These schemes allow you to keep living in your own home as a tenant, part-owner or part-tenant.
If you live in Scotland, you can access more information on the Home Owners’ Support fund at www.mygov.scot/home-owners-support-fund
If you live in Wales, you should contact your local council’s housing options team, homelessness team or housing strategy officers for information on whether there is a mortgage rescue scheme in your area which could help you.
If you are no longer able to afford to live in your home, we may be able to help you sell the property through our assisted voluntary sale scheme. You’ll be able to stay in your property while it’s on the market, you’ll stay in control of the sale process and we’ll even pay your sale costs.
Important information about assisted voluntary sale:
- Once accepted onto the scheme it lasts for six months. During this time, we’ll work with you and the selling agent to achieve a sale. If this time passes and we haven’t achieved a sale, we may extend or remove you from the scheme.
- We’ll pay estate agent and legal costs up to an agreed limit.
This is known as a ‘sale at shortfall’. If you wish to sell your property, regardless of whether there are any mortgage arrears, it may be that the sale price won’t be enough to pay back your mortgage balance. If this is the case, you’ll need to go through our sale at shortfall process.
Important information about selling at a shortfall:
- We’ll obtain an independent valuation to make sure that the sale price is the true market value of the property.
- You’ll remain responsible for paying back any shortfall amount. There are certain exceptions to this if you’ve been declared insolvent (you’ll need to check with your trustee or the Official Receiver).
- We’ll report the shortfall amount to credit reference agencies and this may affect your ability to borrow money in future.
If you no longer wish to remain in the property and have somewhere else to live, regardless of whether there are any mortgage arrears, you can choose to voluntarily surrender the property. This is often known as ‘handing the keys back’. You should think very carefully before going ahead with this option.
Important information about voluntary surrender:
- You must have somewhere else to live before handing back the keys.
- All people named on the mortgage must agree to the voluntary surrender.
- Voluntarily surrendering your property may affect your eligibility for housing support from your local authority.
- You’ll remain responsible for the mortgage balance until we sell the property.
- You must maintain appropriate buildings insurance until the property is sold.
- We’ll place the property on the market and attempt to obtain the best sale price.
- We’ll add the costs of selling the property (for example estate agent and solicitor costs) to your mortgage balance.
- Each month, we’ll tell credit reference agencies about any arrears on your account. After we’ve sold the property, we’ll tell them that we brought the property into possession and whether you’ve repaid the mortgage balance in full. This may make it more difficult or expensive to borrow money in the future. You can find more information about how credit file reporting works here.
- If the property sells for less than the outstanding mortgage balance, you’ll remain responsible for paying back any shortfall amount. If the property sells for more than your outstanding mortgage balance (and any other debts secured against the property), our solicitors will send any surplus money to you.
If you need a short break from making your payments, you may be able to take a payment holiday. A payment holiday allows you to stop making your monthly payments for up to three months.
Things you should consider before taking a payment holiday
- We’ll continue to charge interest whilst your payment holiday is in place. This means the amount you owe will increase and you’ll pay more interest overall.
- When your payment holiday ends, we’ll recalculate your monthly payment. It may increase as a result. We’ll write to you to let you know what your new payment will be.
- If your mortgage is on interest only, the amount you will need to pay back by the end of your mortgage term will increase. You should check that your plans are on track to pay back this amount. If you don’t have a plan or you’re worried that it might not be enough, we can help. Call our dedicated team now on 0330 159 7153. Phone lines are open Monday to Friday 08:30am-6:00pm.
- If your financial situation changes, you can still make payments whilst your payment holiday is in place. This means you’ll pay less interest over the term of the mortgage.
Mr & Mrs A have a repayment mortgage…
- There’s 10 years remaining on the term.
- They currently owe £80,000.
- Their monthly payment is £1,030.
After a three-month payment holiday…
- The amount they owe will have increased by over £1,866 because they haven’t paid the interest due.
- Their monthly payment will go up by over £40 a month. This is because we would recalculate their mortgage payment to make sure they’ll repay their balance by the end of the term.
- They’ll pay more interest over the term of their mortgage unless they make overpayments in the future.
If their mortgage was on interest only, their monthly payment would have gone up by over £14 a month. But the amount they would need to pay back at the end of the term would have increased by over £1,895. They’ll also pay more interest over the term of their mortgage.
Check if you’re eligible
You may be able to apply for a payment holiday if:
- You’ve made your full mortgage payment on time for the last nine months or you’ve previously overpaid by more than the amount of the payments you want to miss.
- You’re up to date with your mortgage payments.
- You can afford the increase to your mortgage payment after the payment holiday ends.
- You’re not (and haven’t previously been) bankrupt or in an Individual Voluntary Arrangement (IVA).
- You’re not in a Debt Management Plan (DMP).
- You don’t receive support from the Department for Work and Pensions (DWP).
- You’re not in breach of your mortgage terms & conditions (for example, you can’t be letting the property without our permission).
- All parties to the mortgage agree to the payment holiday (where there is more than one person named on the mortgage).
- Call us on 0330 159 7152.
Phone lines are open between 8:30am and 6:00pm Monday to Friday.
When you speak to us, we will:
- Ask you when you want your payment holiday to start. This must be the first day of a month, so we recommend contacting us at least 10 days before this, to allow us enough time to process your application.
- Carry out an affordability assessment to make sure that the increased payments are affordable. It will be helpful to have information like payslips, bank statements and how much you spend on your household bills ready when you call. If you’re unable to provide us with this information, it may delay the application process.
- Use information from credit reference agencies. If you have any missed or late payments on other credit commitments, defaults or County Court Judgments (CCJs), this may affect our decision.
- If we can’t offer you a payment holiday and you’re going to struggle to make your mortgage payment, we’re here to help. You can reach our customer assistance team and speak to one of our experienced agents by calling 0330 159 7152. Their phone lines are open Monday to Friday 8:30am – 6:00pm. Or, if you’d prefer you can send us a secure message using our self-serve facility.
You could move to a lower value property with a smaller mortgage by transferring your existing mortgage with us (known as ‘porting’) or by taking out a new mortgage with a different lender. To find out if you can port your mortgage, you’ll need to check your latest mortgage offer.
- Sending us a secure message through our self-serve facility.
- Calling our customer services team on 0330 159 7152.
Phone lines are open Monday to Friday 8:30am – 6:00pm.
You’ll need to speak to one of our qualified mortgage advisors to make sure that moving your mortgage to a new property would be the right solution for you. You can make an appointment by calling us on 0330 159 7152. Phone lines are open Monday to Friday 8:00am – 8:00pm.
Important things to consider
- How much is your existing property worth and how much would a cheaper property cost? Could you afford a mortgage for the difference?
- How will you pay back the smaller mortgage? Will you convert it to repayment over the remaining (or a longer term) or do you have a repayment plan (like an investment or pension) which will pay off the smaller mortgage by the end of the term?
- The new property would need to be acceptable security for a mortgage (either with us or a new lender).
- You will need to meet eligibility criteria for a mortgage with a new lender, you may wish to seek independent financial advice to understand if this is the right option for you.