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.

You can ask to take a break of up to three months if you have been impacted through coronavirus.

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.


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