Mortgage Payment Deferral
Coronavirus mortgages help and support
We understand this could be a worrying and uncertain time and we want to support you as much as possible.
You can apply for a mortgage payment deferral if you have not yet had a payment deferral, or you have had one payment deferral of up to three months, if this is what you feel is right for your situation. Our support team will be able to discuss what other options are available for your individual circumstances.
If you’ve come to the end of your payment deferral, we will have sent you a letter showing your current balance, your new monthly payment amount and your next payment due date. If the revised monthly payment is unaffordable, please contact us after you’ve received your letter and we can discuss alternative ways for the payments to be made, which could include options such as a term extension. You can find out more information here about what alternative options are available following the end of your payment deferral period.
Please note if you don’t take any action after receiving this letter, your new payments will resume on your regular payment date.
A mortgage payment deferral is a break from paying your mortgage for a period of one, two or three months at a time. Interest, at your current rate, will continue to accrue during the agreed period whilst payments are deferred. You will need to repay the deferred payments once your payment deferral ends so your mortgage is fully repaid at the end of the term.
If, during the payment deferral, you can afford to make payments towards your account, we would encourage you to do so. The payment deferral will remain in place as agreed, but the amount deferred will be reduced by any payments you make meaning the amount of interest you pay will be less.
At the end of the payment deferral, the outstanding balance on which future loan interest and contractual monthly payments are calculated will have increased, so that your mortgage will still end when expected. This means the overall amount of interest you pay over the mortgage term will increase. It also means that your monthly payment will increase. You will receive a letter near the expiry of your payment deferral which will detail your new monthly payment, as well as alternative options should this payment be unaffordable. See the examples below, based on a capital and interest mortgage with a 3 month payment deferral.
Current Mortgage Payment details
|Remaining term (years)||25
|Current monthly payment
Updated Mortgage Payment details
|3 month payment holiday interest
|Remaining term (years)||24 years 9 months
|New monthly payment||£839|
|Increase to monthly payment||£11|
Once the agreed payment deferral period ends your contractual payment will be recalculated on the increased balance and we will confirm this new payment in writing to you. You will also have the opportunity to pay the deferred amounts quicker if you would like to. This will reduce the overall amount of interest you pay back over the lifetime of your mortgage. If the revised monthly payment is unaffordable, please contact us and we can discuss alternative ways for the payments to be made, which could include options such as a term extension.
Please note if you don’t take any action, your new payments will resume on your regular payment date.
If you are experiencing financial difficulty due to the impact of coronavirus, for example, due to a reduction in household income, you can apply for a mortgage payment deferral for up to three months, subject to the maximum number of monthly payments deferred since March 2020 not exceeding 6 in total.
You can apply if you have not yet had a payment deferral, or if you have already had a payment deferral you may be eligible for a further deferral period that takes you to the full six months, provided you apply before 31st March 2021.
If you are not eligible to apply for a payment deferral, but require financial support as a result of coronavirus, we have other forms of support to help you. Please call 0800 923 1547* to discuss this further.
Please remember the payment deferral is subject to our approval.
Yes, we can discuss other options with you. For example, if you have made overpayments you may be able to underpay for a period. Or you may have the option to switch to interest-only payments for a limited period. Our support team will be able to discuss what options are available for your individual circumstances. Please be aware, your credit file may be impacted.
It is only a payment deferral if it has been agreed with us.
You should not cancel your direct debit. Cancelling your direct debit is not a payment deferral and will be recorded as a missed payment. This could impact your credit file.
We will write to you at the end of your payment deferral to let you know your new payment amount and we will collect this by direct debit unless you have contacted us to make other arrangements.
You can call us on 0345 111 8020, but please make sure you’ve read and agree to the information on this page before deciding to do this. We’ll send you a text message once we’ve processed your request. Please remember we may be experiencing higher than normal call wait times if you do call.
You need to apply by 31 March 2021 and all payment deferrals must end by 31 July 2021. Remember, carefully consider if you need a payment deferral – and make payments if you can.
If you are newly affected by coronavirus, and you want to benefit from the full 6 months available, you should apply in good time before your February 2021 payment is due. Your payment deferral will then run between February and July.
If you’ve already taken payment deferrals of less than 6 months, you have until 31 March 2021 to apply for another payment deferral.
After 31 March 2021, you can extend an existing payment deferral up until the 31 July 2021, as long as:
- it doesn’t go over the 6-month payment deferral limit
- there are no breaks in the support
You won’t be eligible to apply if you’ve already had payment deferrals of 6 months overall.
If you have a Buy to Let mortgage you will need to telephone us to discuss a payment deferral or alternative options.
If your account is up to date prior to your payment deferral request, then your credit file will reflect this status. If your account, prior to the initial request for a payment deferral , was already in arrears there will be no change to your credit file unless you have paid off these arrears. A worsening status will not be reported on your credit file due to any payment deferral taken. However, you should be aware lenders can look at a wide range of factors when assessing future credit applications, such as bank account information or information you provide.
After the end of your payment deferral, if you require further forms of support, we may update your credit report to reflect details of the support provided- we can advise of this during our discussions with you. Other organisations can see this information when they search your credit report, which may make it difficult for you to get credit in the future.
collapsed What happens if I have already had a six months payment deferral but continue to be financially impacted by Covid-19 and have difficulty making my mortgage payments?
If your finances continue to be impacted by Covid-19 and you have had a full six-months of payment deferral we will discuss alternative support with you, tailored to your needs. It is essential that you contact us before you miss a payment – Please call 0800 923 1547* to discuss this further.
When you speak to us, it is important that you give us as much information about your circumstances as possible to help us understand the appropriate support to offer. We will ask you a range of questions about your circumstances, including your monthly income and expenditure and it would be useful if you have this information to hand. We will also explain the impact on your credit file of the support that is offered.
This support could include, but is not restricted to:
- making a part payment for a short time
- extending the length of the mortgage term
- changing the type of mortgage (e.g. a temporary change to an interest-only mortgage)
- capitalising the interest accrued (i.e. adding the interest owed to the balance of the mortgage)
It will always be in your best interests to pay at least some or all of your mortgage if you can, as this will reduce the amount of your total repayments in the long run.
You may also be eligible for other government support and we encourage you to visit the Money Advice Service website to understand what additional help might be available to you.
If you fall behind on your monthly mortgage payments then you may have to pay extra interest and fees as outlined in our Tariff of Charges. This will be registered with Credit Reference Agencies and could affect your credit rating.
If you're unable to make your payments we've a range of options we can look at to suit your individual needs. But please be aware these may affect your credit file and credit rating.
We can work together to agree a plan to help you. Call our payment difficulties team for free on 0800 923 1547. Our lines are open: Monday to Friday 8:30am to 5:30pm (Closed weekends & Bank Holidays).
There’s lots of information and advice available about managing money and keeping your finances on track. To help you understand how much money you have to pay, it may be useful to work out a budget to help you keep track of your spending and prioritise debt repayments. This will help you understand how much money you have to pay your commitments as you go forward. Moneyadviceservice.org.uk has an online budget planner and a handy Money Navigator Tool to help you with this. They have also have a debt advice locator tool which provides a list of agencies who provide free and impartial debt advice.
For most people, it makes sense to pay essential expenses and priority debts before any discretionary expenses or non-priority debts. To support with this, you can use guides such as the Money Advice Service ‘How to Prioritise your debts’ page. It is a good idea to contact all your creditors to discuss repayments.
SOME USEFUL CONTACTS:
www.nationaldebtline.org / 0808 808 4000. They'll talk you through options and give clear advice on how to take back control. Self-employed customers may also find it useful to visit www.businessdebtline.org.
www.citizensadvice.org.uk Offers free, independent, confidential and impartial debt advice through their web chat service.
www.adviceuk.org.uk Covers not only money and debt advice but, also other areas such as homelessness, drugs and alcohol, benefits, etc.
www.shelter.org.uk Free legal advice and support for homeowners, including how to prevent losing your home.
www.turn2us.org.uk Information on whether you can claim any benefits or other grants to help you if you lose your job or become ill.
The FCA also has a section on their website about dealing with financial difficulty during Coronavirus at fca.org.uk/consumers/dealing-financial-difficulties-coronavirus.