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Ending your mortgage payment holiday

The options below could help you to reduce your monthly payments, or reduce your overall balance. If you have not already taken 6 months payment holiday, there is also the option to apply for a payment holiday extension. This would not reduce your future monthly payments and would increase your balance.

If you would like to extend an existing 3 month payment holiday, see how to apply.

For further support, see our money worries page..

Financial Conduct Authority guidance

 

1. Extend your mortgage term by up to 6 months


If you have a repayment loan (rather than offset), you may be able to extend the term of your loan by up to 6 months. This could help reduce your monthly payments so that they are closer to the amount they were before you took your payment holiday.

If you would like to see the likely change to your monthly payment by extending the term of your mortgage, enter your revised payment details from your end of payment holiday letter into our calculator

If your next mortgage payment is due within 21 days and you wish to select this option, please call us on 03 456 100 103 (lines open Mon to Sat 8am to 8pm and Sun 9am to 8pm) so we can discuss this with you.

The table below can help illustrate how your monthly payment is likely to change by extending your mortgage loan term by 6 months. This table uses rounded figures. 

Loan Balance £150,000 £250,000
Loan BalanceRemaining loan term £150,00015 years £250,00030 years
Loan BalanceInterest rate £150,0002% £250,0002%
Loan BalanceMonthly payment before extension £150,000£965 £250,000£924
Loan BalanceMonthly payment after 6 month term extension £150,000£939 £250,000£913
Loan BalanceDecrease to monthly payments after 6 month term extension £150,000£27 £250,000£11
Loan BalanceFuture total cost of borrowing £150,000£174,573 £250,000£334,156
Loan BalanceAdditional interest payable
(incl. in future total cost of borrowing.)
£150,000£826 £250,000£1,499

By applying for a term extension of between 1 and 6 months, you’re confirming,

  • You’ve been financially impacted by coronavirus (COVID19), and have taken a payment holiday from your first direct mortgage.
  • You’ve received your payment holiday expiry notification letter from us.
  • You were up to date with your payments at the start of your payment holiday.
  • You’re not asking for a term extension which goes beyond a total mortgage term of 40 years.
  • Your requested extension does not take you beyond your retirement age, or extends further into your retirement.

If you submit an application form, this won’t constitute mortgage advice, which means you won’t benefit from the protection provided by the Financial Conduct Authority rules, which otherwise require us to asses the suitability of any mortgage products for you. We will also not be able to make any amendments to this application on your behalf. By submitting a form to apply for a mortgage extension, you agree to progressing on this basis and have read and accepted our terms of service.

We will try to apply your term extension so that it’s reflected in your next monthly payment. However, where we receive your signed acceptance and there’s insufficient time for us to do this, we’ll apply it to your following payment. We’ll write to you to confirm the date your new payment takes effect.

If you do need advice during the application, contact one of our mortgage advisers.

Once you’ve used our calculator to illustrate the likely financial implications of extending your term by up to 6 months, if you would like to apply, complete this form.

Please note, if you apply to extend your term, you won’t be able to extend your payment holiday.

If you would like to consider a longer term extension, please refer to option 4 below.

If you are unable to view the calculator or would like to discuss the possibility of extending your term, please call us on 03 456 100 103 (lines open Mon to Sat 8am to 8pm and Sun 9am to 8pm). 

2. Make a lump sum overpayment

If you have funds available, you could make a lump sum overpayment on your loan.

The letter that you will receive will confirm the amount of interest that has accrued and been added to your balance during your payment holiday period.

By paying this interest amount as a lump sum, you’ll reduce the balance of your loan. This could reduce your monthly payments back to a similar amount as they were before you took your payment holiday and will reduce the cost of borrowing over the remaining term of your loan.

You can call us on 03 456 100 103 (lines open Mon to Sat 8am to 8pm and Sun 9am to 8pm) to discuss making a lump sum overpayment. We’ll be able to tell you what effect it would have on your monthly repayments. We can arrange this for you if you want to go ahead.

3. Apply for another payment holiday

You may be able to apply for a further payment holiday if:

  • You’re due to roll off an existing payment holiday
  • You haven’t taken more than 6 months’ payment holiday in total. The maximum payment holiday duration you're allowed is 6 months, or up to (and including) your July payment date if sooner
  • You’ve received a letter confirming the end of your current payment holiday
  • You’ve been financially impacted, or expect to be financially impacted by Covid-19
  • You’re up to date with your payments or, if you're currently having a payment holidays, were up to date at the start of it
  • Everyone else named on the mortgage has agreed to apply for a payment holiday

And, if you’ve previously had 6 months payment holiday, see other options.

Important to know first

  • Taking another payment holiday will mean that interest will continue to accrue and be added to your loan balance, further increasing your future monthly payments and the total cost of borrowing
  • Although taking a payment holiday will not negatively impact your credit file, lenders may take into account other information when making future lending decisions
  • Following revised guidance issued by the Financial Conduct Authority, payment holidays are now referred to as ‘payment deferrals’, so you may see this phrase used elsewhere
  • A payment holiday will be a variation of your mortgage agreement with us and no other terms or conditions will change
  • If something changes and you would like to shorten your payment holiday, you can contact us to arrange to restart your mortgage payments.
  • If you're able to afford payments of any amount during to your payment holiday, we strongly encourage you to make these as the impact on the amount of interest accruing on your balance, as well as the amount of your future monthly payments and the total cost of borrowing, could be lessened.

See the likely impact of taking another payment holiday

Use our calculator to see the likely change to your monthly payments and total cost of borrowing by applying for another payment holiday. You’ll need:

  • your current remaining loan balance
  • interest rate
  • remaining term

These can be found on your annual statement, your end of payment holiday letter or by logging on to online banking.

Use our calculator

Although taking a payment holiday will not affect your credit file, please do bear in mind that credit files are not the only source of information that lenders use when assessing an application for credit.

Once you’ve used our calculator to see the likely impact of a payment holiday and would like to apply, you can apply online. 

Complete the form.

If you are unable to view the calculator or have any questions about your payment holiday, please call us on 03 456 100 103 (lines open Mon to Sat 8am to 8pm and Sun 9am to 8pm)

Making payments during your payment holiday

If you choose to take a payment holiday, you can pay as little or as much as you like over the duration. These payments can be made as one lump sum, by setting up a regular standing order, or as ad-hoc payments when your finances allow.

To set up a standing order or one off transfer you will need some details from your end of payment holiday letter:

  • Beneficiary = name(s) as appear on your mortgage account.
  • Sort code = first 6 digits of the mortgage account number on your letter, this will always begin 40.
  • Account number = the following 8 digits of the mortgage account number on your letter.
  • Reference = choose your own reference, this is how the payment will appear on your mortgage and your current account statements.

If you want to make payments to more than one mortgage account, you will need to follow the process above for each account. 

By making payments during your payment holiday, you will reduce the amount of interest which accrues over the payment holiday. This means the amount of interest added to your balance at the end of the payment holiday will be less. If there is less interest added to your balance, your future total cost of borrowing is likely to be less. This means your revised monthly payment will be lower than if no payments are made during your payment holiday. 

I want to explore other options to reduce my revised monthly payments

 

4. Rate Switch

You can switch to a new interest rate at any time during your mortgage term and depending on your circumstances, switching rates may save you money each month.

If your next mortgage payment is due within 21 days and you wish to select this option, please call us on 03 456 100 103 (lines open Mon to Sat 8am to 8pm and Sun 9am to 8pm) so we can discuss this with you.

Step 1 – Find and compare our current mortgage rates or view all our mortgage rates.

Step 2 – Book an appointment to speak to someone about your options.

To book an appointment, please call us on 03 456 100 103 (lines open Mon to Sat 8am to 8pm and Sun 9am to 8pm).

I’m worried about being able to make mortgage payments and need additional help

If you consider yourself to be in long term financial difficulty and would like further support, we’re asking you to fill out an Income and Expenditure form to help us understand your current financial position and find the best solution to support you.

It should take about 10-15 minutes to complete and once you’ve completed the form we’ll be in touch to provide personalised support.

More information and access to the Income and Expenditure form.

If you would prefer to speak with someone, please call us on 03 456 100 193 (lines open Mon to Fri 8am to 6pm and Sat 8am to 4pm). Please don’t delay in having a conversation with us about this, we have dedicated people who can help.