What is a Payment Holiday?

A mortgage payment holiday is a break from paying your mortgage. 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.

We are no longer offering new payment holidays but if you are currently taking a payment holiday and have not already taken the maximum allowed of 6 months, you can ask to extend it.

Additional payment holidays must start straight after your current payment holiday and finish by 31 July 2021.

For example, if you’ve had a 2 month payment holiday that ends in April, you could ask for another payment holiday for 3 months taking you up to the end of July.  You’d then make your next regular payment in August.

If you’re in a position to make some payments during the Payment Holiday period we strongly recommend that you do so. You can use our Covid-19 support tool to see how additional payments can reduce the overall interest charged.
 

How will this impact my future mortgage payments?

If you take a mortgage payment holiday you won't make mortgage payments for up to three months. During this period interest will continue to be charged at your existing interest rate(s) and the total amount of interest you pay over the term of the mortgage will increase.

This will result in a higher mortgage balance than if you'd not taken out a holiday. At the end of your payment holiday we'll recalculate your payments over your remaining term, taking this increase into account.

In this way, if you have a repayment mortgage the new monthly payment will ensure you repay the full outstanding balance by the end of your existing mortgage term by spreading the payments you haven't made over your remaining term.

Before your payments are due to restart we will write to you to confirm your new monthly payments.

If you’ve missed payments before your payment holiday began and were in arrears, your new payment won’t cover any of those missed payments.  It’s important you contact us to talk about your options for paying the arrears.If you need independent help and advice, you can get free advice from an agency such as Citizens AdviceStep Change Debt Charity or National Debtline and also at the  Money Advice Service’s coronavirus support hub. 

  

Can I take a payment holiday?

You can apply for a payment holiday if:

  • Your income has been affected by coronavirus
  • You want to extend a current payment holiday and have not already taken a total of 6 months
  • You are no more than 6 months behind with your mortgage payments.

If you are behind with your mortgage payments by more than 6 months, please visit our financial difficulties page for more details on how we can support you.

Where you have a joint mortgage, everyone must agree to the payment holiday.

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