Your options available for paying a payment deferral

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 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 mortgage term.

This is the standard repayment option that will have been applied at the end of your payment deferral unless you contacted us to let us know that you wanted to choose one of the other repayment options.

Before the end of your payment deferral we sent you a letter explaining the options available and this will have included the amount that your monthly payments would increase to.

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 would not have been 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, if you want to talk this through in more detail. 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.


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 deferral: £809.22

    • New total repayable (including £110 redemption administration fee): £239,584.92

    • Additional amount repayable due to payment deferral: £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 deferral. This option will make sure you are paying the deferred payments and the associated interest which accrued during the payment deferral sooner. This is the lowest cost option for repaying your payment deferral.

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 would not have been 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 , if you want to talk this through in more detail. 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 by making a lump sum payment at the end of the payment deferral.

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 deferral: £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 deferral) to catch up on the deferred payments plus the associated interest. As you would 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.

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 deferral. 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 mortgage 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 would not have been 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, if you want to talk this through in more detail. 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 by extending the mortgage term to keep monthly payments at the same level as they were prior to the mortgage deferral.

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 deferral: £793.95

• Increase in term: 12 months

• New total repayable (includes £110 redemption administration fee): £245,279.55

Additional amount repayable due to payment deferral: £8,034.55

Build: 1.3.7.28519