Payment Holidays: What Happens Next?

An option for repayment is to add the deferred payments from your payment deferral 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 deferral 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 deferral 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 deferral 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 0330 433 2258, 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 deferral 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.

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 deferral: £809.22
• New total repayable (including £110 redemption administration fee): £239,584.92
• Additional amount repayable due to payment deferral: £2,339.92

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.

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

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.

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 your loan runs for longer than we initially agreed and you won’t be addressing the deferred payments until the end of the original agreement. This means you will continue to accrue interest on the full amount until then and is therefore the most expensive 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 0330 433 1307, 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