New guidance from the Financial Conduct Authority (FCA) means payment holidays are now also referred to as ‘payment deferrals’. So you may see or hear this phrase used elsewhere. But don’t worry ‘payment holidays’ and ‘payment deferrals’ are the same thing.
Here are some important things you should know first:
during your payment holiday, interest will continue to accrue and will be added to your loan balance
this will result in an increase to your monthly payments (when they restart) and the total cost of borrowing
taking a payment holiday will not worsen the status on your credit file, but keep in mind that lenders may take into account other information when making future lending decisions
taking a mortgage payment holiday is only suitable for short-term financial concerns
find out more about what to do if you have longer-term concerns over your mortgage payments
a payment holiday will be a variation of your mortgage agreement with us, and no other terms or conditions will change
if your situation changes and you'd like to shorten your payment holiday, you can contact us to arrange restarting your mortgage payments
The guidance provided by the FCA states that:
The maximum payment holiday you’re allowed is 6 months in total, but 3 months is the most you can take at any one time.
Since 1 April 2021, you've only been able to apply for another payment holiday if it follows on from a previous one. You can't have made a contractual payment during this time and must have taken less than the 6 months maximum total.
All payment holidays must finish by 31 July 2021.
You can find independent advice from:
If you can afford payments of any amount during your payment holiday, we strongly encourage you to do so. These payments could reduce the amount of interest accruing on your balance, as well as the amount of your future monthly payments and the total cost of borrowing.
You can pay as little or as much as you like and whenever suits you. These payments can be made as a single payment, by setting up a regular standing order, or as ad hoc payments when your finances allow.
To set up a standing order, or one-off transfer, you’ll need:
beneficiary – name(s) on your mortgage account
sort code – first 6 digits of the mortgage account number (this will always begin with 40)
account number – the following 8 digits of the mortgage account number
reference – choose your own reference, this is how the payment will appear on your mortgage statement
Your mortgage account number and sort code can be found on your mortgage statement, or offer. You can also see them by logging on to online banking and looking under ‘My Accounts’.
If you want to make payments to more than one mortgage account, you'll need to follow the process above for each account.
Find out more about payment options.
Before your payment holiday ends, we’ll get in touch by letter to let you know your new monthly payment and explain your options. You’ll need to wait until you receive this letter before deciding what you want to do.
If you're coming to the end of your payment holiday and are yet to receive your letter, find out more about what happens next.
If you’ve already received your letter with your new monthly payments, find out about the next steps.
To discuss your options, please call us on 0800 169 6333 and select option 0.
Lines are open:
Monday to Saturday, 08:00 to 20:00
Sunday, 09:00 to 18:00
If you have a mortgage payment due in the next 7 working days that you'll be unable to make, please call us.
So we can help the customers most in need, please only call if you're in this position.
To bring your mortgage payment holiday to an end before it expires, please call us.