Categories:
Flexible Features,
Ways we can help
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.
Here’s an example of how much taking a three-month payment holiday could cost you...
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).
How to apply:
- 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.