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Payment holidays

Coronavirus and payment holidays

As the impact of coronavirus is felt across the UK, you may be worried about how it could affect you and your home. Your peace of mind is still our top priority, so we’ve created some extra ways to help, if you need it.

If the coronavirus has affected your income, you may wish to take a mortgage payment holiday but you should only apply if you are experiencing difficulties in making your mortgage payments.

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'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 mortgage payments are up to date.
  • If you are behind with your mortgage payments please visit our financial difficulty page to find out more.
  • 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.

Request a payment holiday


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