What is a payment holiday?
A mortgage payment holiday is a break from paying your mortgage. It won’t affect your credit rating, so there’s one less thing to worry about.
You can ask to take a break of up to a maximum of three months if you have been impacted through coronavirus.
We will contact you before the end of your repayment holiday to discuss options appropriate to your financial circumstances and continue to support you if further assistance is needed.
How will this impact my future mortgage payments?
If you take a mortgage payment holiday you won’t make mortgage payments for up to 3 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.
There may be other ways for you to repay the payments you’ve missed, for example making a lump sum payment. But don’t worry, before your payments are due to start we will write to you with more details.