Category:
Ways we can help
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.
Example of how a temporary switch of repayment type could affect you if you're in arrears:
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