As this is a constantly evolving situation, with many unanswered questions, it is important that you speak to us before taking any action; we are currently agreeing, where appropriate, payment holidays of up to three months for all of our customers who have been affected by Covid-19.
If you already have a payment holiday that will shortly be coming to an end, we will be in contact to agree next steps with you; this could include an extension of your payment holiday where appropriate. It is important you understand the impact of deferring your monthly instalments on your mortgage, so our team may ask you further questions and provide you with information about the long term impact before agreeing the payment holiday with you.
We’re available to help all our customers and our team are doing their best under difficult circumstances, but we need to be able to speak to those in the most vulnerable situations first, so we would ask you to think about how urgent your call is before making it. If you are worried about your ability to pay your mortgage, please call our team seven to five days before your monthly payment is due.
To help alleviate any concerns you may have about how Covid-19 may impact your ability to pay your mortgage today or in the future, we have developed some frequently asked questions, which we hope will help provide the reassurance you may be looking for.
Covid-19 has affected my ability to make my mortgage payment; when should I call you?
Please call us seven to five days before your mortgage payment is due; this will help our team speak to those customers who need help at the right time.
I am affected by Covid-19, can I have a payment holiday?
If you or your family are affected by Covid-19, and you will struggle to pay your mortgage payment, please speak to our team so we can discuss the best option for you, which may well be a payment holiday; however, it is important that you speak to our team and formally agree the best option for you, to ensure there is no detriment to the current position of your credit record.
Will you give me a three-month payment holiday?
The situation is evolving so quickly that we think it is important to maintain regular contact with our customers, which is why we would like to assess your situation. A payment holiday is a way to defer your monthly instalment, but it will still be payable in the future and your account will still accrue interest; which means a three-month payment holiday may not be the best option for everyone. If you are unsure how long your financial circumstances will be impacted, it may be better to have a payment holiday for a shorter period and request an extension to your payment holiday when you know if this is needed. The longer the payment holiday you take the greater the increase in the additional interest you will pay.
What is a payment holiday and how does it work?
A payment holiday will mean that you will not have to make your monthly mortgage payment for an agreed period; the monthly payment is deferred to a later date. It’s important to remember you will still owe the money and interest will continue to accrue whilst the deferred payments remain unpaid. If you are able to make your monthly payment, you should maintain payments rather than requesting the payment holiday in order to avoid the cost of your mortgage increasing. Whilst a payment holiday will not be recorded on your credit file and will not impact your credit score, you should consider that it may impact your ability to borrow in the future. Some lenders may take account of the payment holiday when considering applications for credit.
How will a payment holiday impact my mortgage?
Your monthly instalment(s) will be deferred, interest will still accrue on your account and payment for the deferred monthly instalment(s) will be required later. The total cost of your mortgage will increase as a result of the additional interest that accrues during the payment holiday. Before agreeing a payment holiday with you, we will tell you the estimated increase in your monthly payment that will be required to pay off the mortgage during its term as a result of the payment holiday.
Should I pay something rather than nothing?
If we agree a payment holiday with you and you can then afford to make a part payment, we would strongly urge you to consider doing this as it will reduce the amount of interest that accrues and the overall amount outstanding at the end of the agreed payment holiday.
How will you expect me to make up the deferred monthly instalment(s) after my payment holiday?
We will review your circumstances at the time and work with you to find the best solution. For example, we may consider:
- adding the deferred instalment(s) to your outstanding mortgage balance (capitalising the amount), so you can pay it over the remaining term of your mortgage,
- agreeing to a short-term payment arrangement to clear the deferred instalment(s) over several months; or,
- extending the original term of your mortgage.
Will a payment holiday have a negative impact on my credit record?
If we agree a payment holiday with you due to the Covid-19 virus, then we will continue to report your mortgage account in the same position it was at the point the payment holiday was agreed.
Whilst the payment holiday on your mortgage will not affect your credit record, financial services firms may consider information other than your credit record when deciding whether they will provide you with credit. As a result the payment holiday could affect your ability to remortgage or take out other forms of borrowing in future.
Are payment holidays available for Buy-to-Let customers?
Yes. If you are a Buy-to-Let customer who is currently up to date with their mortgage payments and your tenants are impacted by Covid-19, a payment holiday may be an option available to you. Payment holidays are being provided on the understanding that this relief will be passed on to your impacted tenants.
Where we become aware that you are not passing on the benefit of the payment holiday to your impacted tenants, we may withdraw the payment holiday.
I’ve agreed a payment holiday with you, but I’ve logged into my account online and the payment is showing as due and outstanding?
Please bear with us, we are working through the technicalities of offering payment holidays to our customers. We can assure you that if you have agreed the payment holiday with our team, your payment is not due, your credit record will continue to be reported as in the same position as the previous month. We will update your online mortgage account as soon as possible.
I’ve agreed a payment holiday with you, but I have received unexpected correspondence; what should I do?
Please bear with us, we are working through the technicalities of offering payment holidays to our customers. We can assure you that if you have agreed the payment holiday with our team, your payment is not due, and your credit record will continue to be reported in the same position from when you took your payment holiday. Please ignore any correspondence that notes otherwise.
However, we are required to keep you up to date with the general position on your accounts, so should you be a customer who had payment arrears prior to your payment holiday, you will continue to receive communications on this, and we will work with you to address your payment arrears as well as your payment holiday once your payment holiday is coming to an end.
What should I do if I've experienced a bereavement?
If you need to tell us about a customer who has died, please contact us on 0333 300 0921. We understand that the current lock-down might make the task of resolving their affairs more difficult, but we will do all we can to minimise unnecessary stress.
I already have a payment holiday with you that is due to end soon; what should I do?
If you already have a payment holiday with us then we will get in contact with you before this ends to agree next steps and work out with you the best way to get your mortgage back on track. This could include:
- adding the deferred amount resulting from your payment holiday to your outstanding mortgage balance (capitalising the amount), so you can pay it over the remaining term of your mortgage,
- agreeing to a short-term payment arrangement to clear the deferred amount over several months; or,
- extending the original term of your mortgage.
If you are still unable to pay your mortgage after the 3 month period we will discuss other options with you, including, where appropriate, an extension of your payment holiday.
It is important you understand the impact of a deferring your monthly payments on your mortgage, so our team may ask you further questions and will provide you with information about the long term impact before agreeing an extension to your payment holiday with you.
If you are able to make your monthly payment, you should do so rather than requesting a further payment holiday in order to avoid a further increase in the cost of your mortgage.
Questions for our customers already struggling with payment arrears
What happens if I’m already in arrears and are affected by Covid-19; can I have a payment holiday?
If you or your family are affected by Covid-19 and you’re concerned about the impact on your income, please speak to our team as soon as possible. We will review the changes to your circumstances and look at what options may be available to you, including a payment holiday.
What will happen to my credit record if I’m in arrears and I agree a payment holiday?
If you are currently in arrears and agree a payment holiday with our team due to the Covid-19 health emergency; your mortgage account will be reported as in the same position as the previous month. This means your arrears position will not worsen whilst you are in an agreed payment holiday.
I’m already in arrears and concerned that my situation is not going to improve; will you repossess my home?
No. In March we placed all repossession action on hold for three months. The Government and the Financial Conduct Authority have now confirmed that no repossession activity will take place (other than at the request of the customer) before 31st October 2020.
Should you feel that remaining in the property is not right for you and may be causing you financial distress and would like to discuss how to resolve the position, we can assist and would encourage you to contact us on 0333 300 0939.
Are you still charging arrears management fees?
No. We are temporarily waiving arrears management fees for all customers.
I received a letter telling me that you will be taking legal action against me; is that right?
We are currently working through our automated processes to stop our system sending certain automated letters. If you have recently received a letter stating that we will be taking or starting legal action against you, please rest assured that on the 17 March we placed all legal action on hold as required by the official guidance and we continuously monitor the situation.
If you have failed to contact us to agree support during this difficult time and have missed payments, then we may look to communicate with you in line with the updated guidance. This is to ensure you are fully aware of the implications of the missed payments alongside a failure to discuss the matter with us.
What happens next month, will you be reviewing your position?
Yes. We are constantly reviewing the situation and closely following guidance issued by the government and our regulatory body. Please check back here for regular updates.
During this particularly difficult period, you may have financial worries that concern more than just your mortgage payments.
There are independent charities and services that can help you work through your financial situation, identify which are your priority debts and help you liaise with all your creditors.