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Coming to the end of your payment holiday?

If you’re taking a break from your mortgage payments, you might be wondering what happens when your payment holiday ends.

While you’re on your payment holiday, you don’t need to do anything. We’ll write to you before it ends to let you know.

  • Your new monthly payment amount. This will be higher than before your payment holiday, to cover the interest charges and payments you missed while you took a break.
  • All the options and support available to you after your payment holiday. This will include some useful tips and advice on how to get your mortgage back on track.
  • How we can help if your income is still affected by coronavirus. We’ll tell you how we can help if you’d like some more support.

In the meantime, please don’t call us. Rest assured we’ll be in touch before your current payment holiday ends.

What are my options when my payment holiday ends?

Depending on your current circumstances, there are different options available.

I am ready to restart my payments and want to explore the best option to get back on track.

My income continues to be impacted by coronavirus and I need extra support after a payment holiday

I’m finding it hard to make any payments or am facing financial difficulties

Start paying your new monthly payment

When your payment holiday ends, you can simply choose to continue to pay your new monthly amount. This spreads the cost of your payment holiday across the rest of your term. If you do this, the total amount you pay back on your mortgage will be greater than the amount prior to your payment holiday as interest will be charged on a higher mortgage balance.

If you pay by Direct Debit – you don’t need to do anything. We’ll change the amount you pay each month and collect it as usual when it’s due.

If you cancelled your Direct Debit – you’ll need to call us to set up another Direct Debit on 0345 602 6200, to cover your new monthly amount. You need to do this at least five days before your next payment is due. If your Direct Debit will not be set up in time for your next monthly payment we can tell you how else to pay.

If you pay by standing order – you'll need to restart your monthly payments before the next one is due. It's important to remember to do this to make sure that your account doesn't fall into arrears.

If you have an interest-only mortgage – you should make sure that you have enough money put aside to repay the higher balance when your term ends.

If you have any questions regarding this process please call us on 0345 602 6200.

Make a lump-sum overpayment to cover the payments you missed

When your payment holiday ends, you might want to overpay your mortgage to cover the payments and interest charges you missed.

You can make a one off, lump-sum overpayment or set up an instruction to pay more than your usual amount each month.

Here are some examples of how this could affect your mortgage:

A 3 month payment holiday followed by regular overpayments

Repayment Mortgage Interest Only Mortgage
Outstanding mortgage balance before payment holiday £100,000 £100,000
Interest rate 2.75% 2.75%
Term remaining 20 years (repayment mortgage) 20 years (repayment mortgage)
Regular overpayment £200 pm for 12 months £200 pm for 12 months
Monthly payment before payment holiday £542 £229
New monthly payment after payment holiday £551 £231
New monthly payment after overpayment ** £538 £225
Reduction in monthly payment resulting from overpayments £13 £6
Total amount to repay before payment holiday £130,120 £155,000
Total amount to repay after three month repayment holiday £130,605 £155,375
Total amount to repay after overpayments £129,925 £154,100
Reduction in total amount to repay due to overpayments £680 £1,275

Please note that these examples do not apply to offset mortgages. If you have an offset mortgage you can find out more about how this works by accessing our dedicated offset information.

A 3 month payment holiday followed by a lump-sum overpayment

Repayment Mortgage Interest Only Mortgage
Outstanding mortgage balance before payment holiday £100,000 £100,000
Interest rate 2.75% 2.75%
Term remaining 20 years (repayment mortgage) 20 years (repayment mortgage)
Lump-sum overpayment £1,000 £1,000
Monthly payment before payment holiday £542 £229
New monthly payment after payment holiday £551 £231
New monthly payment after overpayment £545 £228
Reduction in monthly payment resulting from overpayment £6 £3
Total amount to repay before payment holiday £130,120 £155,000
Total amount to repay after three month repayment holiday £130,605 £155,375
Total amount to repay after overpayment £130,315 £154,835
Reduction in total amount to repay due to overpayment £290 £540

* Lump-sum or regular overpayments will not be automatically considered after a payment holiday. You will need to call us to discuss these options.

** Monthly payments are only changed if you request a recalculation.

Please note that these examples do not apply to offset mortgages. If you have an offset mortgage you can find out more about how this works by accessing our dedicated offset information.

If you have an arrears balance on your mortgage from before you took a payment holiday, any lump-sum overpayment you make will be allocated against the arrears balance first. If you overpay more than the arrears balance, the surplus will be allocated against the payments and interest charges you missed.

You can overpay in two ways:

Overpay a lump sum

If you wish to make a lump-sum overpayment please call us on 0345 602 6200 where we'll discuss your options with you and explain how we can help. Our lines are open 8am - 8pm Monday to Friday and 8am - 4pm on Saturdays. We're closed on Bank Holidays.

Set up a regular overpayment

Pay a little more than usual each month. If you already pay your mortgage by Direct Debit and you're registered for Online Banking, it's quick and easy to set up a regular overpayment online.

If you don't use internet banking, don't worry, call us on 0345 602 6200 where we will be happy to help.

Ask us to work out your new monthly amount

If you want your overpayments to reduce your monthly payments, you'll need to ask us to recalculate your new lower monthly amount.

If you don't request your new amount your monthly payments will be the same amount as before you overpaid. Your monthly mortgage payment will only be recalculated the next time we need to do it, for example following a Bank of England Base Rate change.

To request a monthly payment recalculation call us on 0345 602 6200.

Use offset to cover the interest from the payments you missed

If you have an Offset Account you might want to pay money into this account to offset the interest you would be charged for the payments you missed.

You can make a one off lump-sum payment into your Offset Account, or set up a regular payment, whatever works best for you.

Find out more about how offset works.

Extend your mortgage term to keep your payments down

If your payment holiday is coming to an end and you’re ready to restart your mortgage payments, you’ll be aware that the amount you pay each month will go up to cover the payments and interest charges you missed while you took a break. If you want to reduce your payments you could consider a term extension.

What is a term extension?

A term extension is where you pay your mortgage for a longer period of time, to reduce your monthly payment.

How will a term extension affect my mortgage?

When you extend your mortgage term, the amount you pay each month will go down. However, it’s important to remember that you will pay more in interest charges as it will take you longer to repay the mortgage.

If you are looking to reduce the total amount of interest payable and the overall cost of borrowing over the term of your mortgage, you should consider the option to make an overpayment rather than a term extension.

How do I apply for a term extension?

If you wish to apply for a term extension we’ll need to discuss your options, please call us on 0345 602 6200.

Extend your payment holiday for another three months

If you're in a position to resume your payments after your break, we strongly recommend that you do so to keep your monthly payments and interest charges as low as possible. If you think you will be able to make part of your monthly payment please call us on 0345 602 6200 to set this up.

However if you find that you need further support when your payment holiday ends, but you think you'll be able to resume your monthly payments in three months' time, you may be able to take another payment holiday for an extra three months. If you think this is the best option for you, you can apply online.

What if I have taken a 1 or 2 month payment holiday?

You can ask to take a payment holiday for the remaining months that add up to a maximum of 3 months in total. You will need to call us to let us know you would like to take this.

I’m finding it hard to make any payments or am facing financial difficulties

If you think your income will be affected longer term, we have a number of ways to help. If you think you’re in danger of falling behind with your mortgage payments, the key thing is to remember to let us know as soon as possible. We’ll do everything we can to help ease your situation and get you back on track.

If you’re worried about your situation, please call us on 0800 028 4347. We’ll discuss your options with you and explain how we can help. Lines are open 9am to 5pm Monday to Friday. We’re closed on Bank Holidays. Find out more about how we can help.

If coronavirus has affected your income, you can find out more about the support available to you on the UK Government website.

Will a Payment Holiday affect my Credit Score?

Payment holidays will not have a negative impact on your credit file. However, you should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.

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