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Ways we can help
If you’ve got your finances back on track, you might be able to add your arrears to your outstanding mortgage balance and pay them back over your remaining term. This is known as ‘capitalising’ your arrears. You will need to maintain your agreed monthly payments for at least 6 months before we’ll consider capitalising your arrears. This is to try and reduce the risk of you falling back into arrears.
Important information about capitalisation:
- Your monthly payments will increase if we capitalise your arrears to be repaid over your remaining mortgage term. We’ll need to check that you can afford the increased monthly payments.
- If we capitalise your arrears, 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.
When deciding whether capitalising your arrears is right for you, you should weigh up the benefits against the additional cost. If you’re unsure, you may wish to seek independent advice to help you make the right decision.