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Payment Holidays: What Happens Next?


If you're coming to the end of a payment holiday or similar payment arrangement with Together, we will have sent (or be sending) you a letter to confirm next steps - including the different repayment options available to you.

To help you make the right decision for you at the end of your payment holiday, we've produced this guide to the options available to you.


Jump to:

What is a payment holiday?

I'm a personal customer. What happens at the end of my payment holiday?

I'm a commercial customer. What happens at the end of my payment arrangement?

My payment holiday or arrangement is due to end but I am still struggling financially - what are my options?

I have a different query about my payment holiday



What is a payment holiday?

A payment holiday is put in place when you and your lender agree that you won't make repayments on your mortgage for a period of time. The payments are deferred, so they will still need to be repaid and interest will continue to be applied at your current rate. This means that the total amount that you need to repay over the term of your mortgage will increase during a payment holiday.

In order to repay the deferred payments and associated interest within your contracted term, either your monthly payments will need to increase or additional payments will need to be made. There are alternative repayment options available, which are outlined below for both personal and commercial customers.



I'm a personal customer. What happens at the end of my payment holiday?

We've listed below the four repayment options available to you following the end of your payment holiday.

The repayment options are listed starting with the standard option we may apply, and then in order of the options which will allow you to pay your deferred payments and associated interest most quickly.


Option 1. Repay the deferred payments and associated interest within your contracted mortgage term 

An option for repayment is to add the deferred payments from your payment holiday and any associated interest to your mortgage balance. This means you will be given a new, increased monthly instalment and the cost of the payment holiday would be spread over the remainder of your loan term.

This is the standard repayment option that will be applied at the end of your payment holiday unless you contact us to let us know that you want to choose one of the other repayment options.

Before the end of your payment holiday you will get a letter from us explaining the options available and this will include the amount that your monthly payments will increase to. If you want to select this option you do not need to contact us.

If you've previously arranged to make regular overpayments to reduce your balance, pay any costs, fees and charges, historic arrears, interest accrued by arrears and costs fees and charges and/or increased your payments to pay the additional interest that accrues from changing your payment date, this will not be included in your repayment amount. Put simply, this repayment option is based on how you will repay your deferred contractual monthly payments and associated interest and does not consider any other arrangements you may have had in place.

Please call us on 0161 333 7404, to discuss how this would impact your new monthly payment. We’re here from 9am to 5:30pm, Monday to Friday.

Below is an example of the impact of a 3 month payment holiday where the deferred payments and associated interest are repaid over the full term of the mortgage.

Please be aware that this example payment increase per month is based on calculations for an account which has never been in arrears and has been recently funded.

Example

Sam has a repayment mortgage of £107,530 with an interest rate of 7.44%, and is 46 months into a 25-year term.

  • Original monthly payment: £790.45
  • Original total repayable (including £110 redemption administration fee): £237,245
  • New monthly payment after 3 month payment holiday: £809.22
  • New total repayable (including £110 redemption administration fee): £239,584.92
  • Additional amount repayable due to payment holiday: £2,339.92

Option 2. Make a lump sum payment 

Another option for repayment is to make a lump sum payment to put your account back in the position it was prior to taking the payment holiday. This option will make sure you are paying the deferred payments and the associated interest which accrued during the payment holiday sooner. This is the lowest cost option for repaying your payment holiday.

If you've previously arranged to make regular overpayments to reduce your balance, pay any costs, fees and charges, historic arrears, interest accrued by arrears and costs fees and charges and/or increased your payments to pay the additional interest that accrues from changing your payment date, this will not be included in your repayment amount. Put simply, this repayment option is based on how you will repay your deferred contractual monthly payments and associated interest and does not consider any other arrangements you may have had in place.

Please call us on 0161 333 7404, to discuss how this would impact your monthly payment. We’re here from 9am to 5:30pm, Monday to Friday.

Below is an example of the impact of a 3 month payment holiday where the deferred payments and associated interest are repaid by making a lump sum payment at the end of the payment holiday.

Please be aware that this example is based on calculations for an account which has never been in arrears and has been recently funded.

Example

Sam has a repayment mortgage of £107,530 with an interest rate of 7.44%, and is 46 months into a 25-year term.

  • Original monthly payment: £790.45
  • Original total repayable (including £110 redemption administration fee): £237,245
  • Lump sum payment for three deferred payments and associated interest, plus the monthly payment due: £3191.31
  • Subsequent monthly payments for remaining term following lump sum payment: £790.44
  • New total repayable (including £110 redemption administration fee): £237,272.01
  • Additional amount repayable due to payment holiday: £27.01

Option 3. Increase your monthly payment over a shorter period of time 

Another option for repayment is where you can pay more than the minimum new monthly payment amount (which is included in the letter we will send you before the end of your payment holiday) to catch up on the deferred payments plus the associated interest. As you will pay it sooner, the amount of additional interest that accrues will be less than if you spread the payments over the remaining term of your mortgage.

If you've previously arranged to make regular overpayments to reduce your balance, pay any costs, fees and charges, historic arrears, interest accrued by arrears and costs fees and charges and/or increased your payments to pay the additional interest that accrues from changing your payment date, this will not be included in your repayment amount. Put simply, this repayment option is based on how you will repay your deferred contractual monthly payments and associated interest and does not consider any other arrangements you may have had in place.

Please call us on 0161 333 7404, to discuss how this would impact your new monthly payment. We’re here from 9am to 5:30pm, Monday to Friday.

Below is an example of the impact of a 3 month payment holiday where the deferred payments and associated interest are repaid by making an increased payment each month 12 months after the payment holiday.

Please be aware that this example is based on calculations for an account which has never been in arrears and has been recently funded.

Example

Sam has a repayment mortgage of £107,530 with an interest rate of 7.44%, and is 46 months into a 25-year term.

  • Original monthly payment: £790.45
  • Original total repayable (including £110 redemption administration fee): £237,245
  • Following end of payment holiday, 12 increased monthly payments to clear deferred payments and associated interest: 11 payments of £1,004.22 and 1 payment of £1,000.94
  • Monthly payment following the 12 months of increased payments: £790.44
  • New total repayable (including £110 redemption administration fee): £237,433.22
  • Additional amount repayable due to payment holiday: £188.22

Option 4. Extend the term of your mortgage 

Another option for repayment is to extend the term of your mortgage. This means we will recalculate your mortgage term to repay the deferred payments and associated interest whilst keeping your monthly repayment amounts around the same amount as your contractual payments were before the payment holiday. To ensure that this option is affordable and sustainable we will need to discuss your financial situation, i.e. your income and outgoings. When extending the term of your mortgage, if you are not already retired, we would not extend the term into retirement.

Extending your mortgage term means the loan runs for longer than we initially agreed and is the slowest option to repay your payment holiday. This option is not available for customers on an interest only loan and is significantly more expensive than any other option.

If you've previously arranged to make regular overpayments to reduce your balance, pay any costs, fees and charges, historic arrears, interest accrued by arrears and costs fees and charges and/or increased your payments to pay the additional interest that accrues from changing your payment date, this will not be included in your repayment amount. Put simply, this repayment option is based on how you will repay your deferred contractual monthly payments and associated interest and does not consider any other arrangements you may have had in place.

Please call us on 0161 333 7404, to discuss how this would impact your new monthly payment. We’re here from 9am to 5:30pm, Monday to Friday.

Below is an example of the impact of a 3 month payment holiday where the deferred payments and associated interest are repaid by extending the mortgage term to keep monthly payments at the same level as they were prior to the mortgage holiday.

Please be aware that this example is based on calculations for an account which has never been in arrears and has been recently funded.

Example

Sam has a repayment mortgage of £107,530 with an interest rate of 7.44%, and is 46 months into a 25-year term.

  • Original monthly payment: £790.45
  • Original total repayable (includes £110 redemption administration fee): £237,245
  • New monthly payment after 3-month payment holiday: £793.95
  • Increase in term: 12 months
  • New total repayable (includes £110 redemption administration fee): £245,279.55
  • Additional amount repayable due to payment holiday: £8,034.55

Option 1. Repay the deferred payments and associated interest within your contracted mortgage term 

An option for repayment is to add the deferred payments from your payment arrangement and any associated interest to your overall mortgage balance. This means you will repay your missed payments and associated interest on a monthly basis, over the remainder of your term. You will be given a new, increased monthly instalment to reflect the amount you are repaying.

This is the standard repayment option that will be applied at the end of your payment arrangement unless you contact us to discuss a different option. Before the end of your payment arrangement you will get a letter from us and this will include the amount that your monthly payments will increase to.

When we provide you with a revised monthly payment amount, this will not include any overpayment you currently make to cover any costs, fees, charges, arrears or any amount you have chosen to pay to repay your account sooner. Your revised monthly payment will reflect your new contractual payment only.

To ensure you continue to address any arrears, costs or charges, please contact us on 0161 333 7416 so we can discuss how you will repay these costs. Please note, if you do not get in touch with us, interest will continue to be applied on any unpaid arrears or charges and further action may be taken in respect of these amounts.

If you choose to pay back your payment arrangement over the full term of your loan, we have calculated an illustrative example to help you understand the potential impact to your monthly payments.

Below is an example of the impact if you deferred your payments for 2 months and you are repaying this over your full term. Please be aware that this example is based on calculations for an account which has never been in arrears and has recently funded:

  • Repayment mortgage of £66,670
  • 16 months into a 25 year term
  • Interest rate of 7.99%
  • Original monthly payment is £221.25
  • Original total repayable: £66,670
  • Increased monthly payment after 2 month payment arrangement: £224.74
  • New total repayable: £67,218.66
  • Additional amount repayable due to the payment arrangement: £548.66

Option 2. Make a lump sum payment 

Another option for repayment is to make a lump sum payment to put your account back in the position it was prior to taking the payment arrangement. This option will mean you are paying the deferred payments and the associated interest which accrued during the payment arrangement sooner. This is the lowest cost option for repaying your payment arrangement.

If you've previously arranged to make regular overpayments for the following reasons:

  • to reduce your balance;
  • or to pay any costs, fees, charges, historic arrears or interest accrued by arrears.

This will not be included in your repayment amount. This means we will increase your contractual monthly payment only, and to continue repaying any interest or charges as stated above, you will need to contact us on 0161 333 7416.

Illustrative example:

  • Repayment mortgage of £66,670
  • 16 months into a 25 year term
  • Interest rate of 7.99%
  • Original monthly payment is £221.25
  • Agreement reached to repay over 5 months
  • One off payment amount is £668.18 (this includes your contractual monthly payment following your payment arrangement)
  • New monthly payment is £221.25 (this will resume after you have repaid your arrangement and arrears)
  • New total repayable is £66,677.92
  • Additional amount repayable due to 2 month payment arrangement is £7.92

Option 3. Make an increased monthly payment over a shorter period of time 

Another option is to repay over an agreed period of time. This means you will pay more than the minimum new monthly payment due on your account to catch up on the deferred payments plus the associated interest sooner. As you will pay it sooner, the amount of additional interest that accrues will be less than if you spread the payments over the remaining term of your mortgage.

If you've previously arranged to make regular overpayments for the following reasons:

  • to reduce your balance;
  • or to pay any costs, fees, charges, historic arrears or interest accrued by arrears.

This will not be included in your repayment amount. This means we will increase your contractual monthly payment only, and to continue repaying any interest or charges as stated above, you will need to contact us on 0161 333 7416.

Illustrative example:

  • Repayment mortgage of £66,670
  • 16 months into a 25 year term
  • Interest rate of 7.99%
  • Original monthly payment is £221.25
  • Increased monthly payment after 2 month payment arrangement is £324.74 for 4 months and a final increased monthly payment of £266.01 for 1 month
  • New monthly payment is £221.25
  • New total repayable: £66,686.22
  • Additional amount repayable due to the payment arrangement is £16.22

Option 4. Extend the term of your mortgage 

Another option for repayment is to extend the term of your mortgage. This means we will recalculate your mortgage term to repay the deferred payments and associated interest whilst keeping your monthly payment consistent with your current amount. We would aim for the revised payments to remain around the level it was originally to help make the repayments affordable and sustainable. Extending the term means the loan runs for longer than we initially agreed and is the slowest option to repay your payment arrangement. This option is not available for customers on an interest only loan and is significantly more expensive than any other option.

If you've previously arranged to make regular overpayments for the following reasons:

  • to reduce your balance;
  • or to pay any costs, fees, charges, historic arrears or interest accrued by arrears.

This will not be included in your repayment amount. This means we will increase your contractual monthly payment only, and to continue repaying any interest or charges as stated above, you will need to contact us on 0161 333 7416.

Illustrative example:

  • Repayment mortgage of £66,670
  • 16 months into a 25 year term
  • Interest rate of 7.99%
  • Original monthly payment is £221.25
  • Extended term after 2 month payment arrangement is 13 months
  • New term is 26 years 1 month
  • Customer is now 16 months into a 26 year 1 month term
  • New monthly payment is £221.46
  • New total repayable: £69,166.12
  • Additional amount repayable due to the payment arrangement: £2,496.12
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