Please use the Quicklinks menu below in order to navigate through the site.

Quicklinks

Payment holidays

Coronavirus and payment holidays

We are no longer offering new mortgage payment holidays.

If you are currently taking a payment holiday, and need further support, you can ask to extend it subject to a maximum six months in total.

If you're worried about your financial situation because of coronavirus, we have support we can offer you. Please contact us.

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 a maximum of three months if you've been impacted through coronavirus.

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.

There may be other ways for you to repay the payments you’ve missed, for example by making a lump sum payment. But don’t worry, before your payments are due to restart we will write to you with more details and give you all the options available.

Payment holiday examples

Here are some examples of how a payment holiday can affect monthly payments and the total amount payable for repayment and interest only mortgages. The examples shown below are for a three-month payment holiday:

Repayment mortgages

Current outstanding mortgage balance £50,000 £100,000
Interest rate 2.75% 2.75%
Term remaining 7 years (repayment mortgage) 20 years (repayment mortgage)
Current monthly payment £655 £542
New monthly payment after payment holiday £682 £551
Monthly increase £27 £9
Total amount to repay without payment holiday £55,024 £130,120
Total amount to repay with three month repayment holiday £55,219 £130, 605

Interest only mortgages

Current outstanding mortgage balance £50,000 £100,000
Interest rate 2.75% 2.75%
Term remaining 7 years (interest only mortgage) 20 years (interest only mortgage)
Current monthly payment £114 £229
New monthly payment after payment holiday £115 £231
Monthly increase £1 £2
Total amount to repay without payment holiday £59,625 £155,000
Total amount to repay with payment holiday £59,691 £155,380

The capital amount repayable at the end of your mortgage term will also increase by any interest charged during the holiday period.

You may need to consider whether you’ll have sufficient funds to be able to repay this at the end of the mortgage term.

What other options are available?

If you have an Offset Saver Account or Mortgage Reserve Account you may be able to use these facilities to cover your monthly payments during this period. You must decide which option is best for you.

Can I take a payment holiday?

You can apply for a payment holiday if:

  • Your income continues to be affected by coronavirus
  • You want to extend an existing payment holiday, and have not already taken more than a total of six months
  • You are no more than six months behind with your mortgage payments.

If you are behind with your mortgage payments by more than six months, please visit our financial difficulty page for more details on how we can support you.

Where you have a joint mortgage, everyone must agree to the payment holiday.

How do I apply for a payment holiday?

Mortgage payment holidays can help with a temporary reduction in outgoings. However, your mortgage balance will increase and you will pay more over the term of your mortgage. So, it's important that you only apply if you're currently having difficulties making your mortgage payments.

If you still want to apply, we're currently dealing with a much higher number of phone calls than usual, so you may find it quickest to ask for a payment holiday by using our online form.

Before you apply you'll need to use our payment holiday impact calculator, which will show you how taking a break from your payments could affect your mortgage and how much you pay each month. It's important you understand the impact a payment holiday could have on your mortgage before asking to take a break from your payments.

Payment holiday impact calculator

If you need independent help and advice, you can get free advice from an agency such as Citizens Advice, Step Change Debt Charity or National Debtline and also at the Money Advice Service’s coronavirus support hub.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.