What is a mortgage payment holiday?

If you think you'll struggle to make your monthly mortgage payments because of coronavirus, we can help by offering our members a 3-month 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.

Is a mortgage payment holiday the right option for me?

It’s important to remember that a mortgage holiday is a temporary break from your mortgage payments, to help you through these uncertain times.

There are a few things to consider before applying for a mortgage payment holiday, to make sure it’s right for your situation:

  • Currently, we can only offer 3-month payment holidays. You’ll be able to apply for a mortgage payment holiday until at least 30 April 2020.
  • The most appropriate time for you to take out a mortgage payment holiday will depend on your individual circumstances. If you’re not yet sure how much the current situation will impact your finances, or if you’ll be able to keep paying your mortgage, there’s still time to consider the best option for you.
  • If you have an overpayment reserve, you could underpay instead.

Other options to a payment holiday you could consider

There are other changes that you can make to your mortgage, subject to eligibility, that may be more suitable for your situation. These include:

If you need longer term support, or you’re worried about starting your payments again in 3 months’ time, see our money worries page.

What impact will a payment holiday have on my future monthly payments?

When your payments start again after the payment holiday they’ll be recalculated, and you may see an increase in your monthly payments.

Interest will continue to build at your usual interest rate during the payment holiday and the total amount of interest you pay over the term of the mortgage will increase.

This will result in a slightly higher mortgage balance than if you’d not taken out a holiday. We’ll need to recalculate your payments over your remaining term, taking this increase into account.

Here are some examples of how mortgage payments could change after taking out a payment holiday.

Mortgage balance £150,000 £300,000
Mortgage term 20 years 30 years
Interest rate 1.8% 1.8%
Monthly payment before £745 £1079
Monthly payment after £756 £1091
Increase to your monthly payments £11 £12

The amount your payment will increase by depends on your mortgage balance, mortgage term and interest rate.

What happens after I apply?

Once the payment holiday has been applied to your account, we’ll write to you confirming when your payment holiday will start.

Where we can, we’ll start your payment holiday from your next payment. However, if your next payment is due in the next few days, your payment holiday may start the following month.

We'll aim to get back to you and confirm within 5-7 working days from when you submit your payment holiday application. But, due to high volumes of applications right now, it might take slightly longer.

You do not need to cancel your Direct Debit. Keeping it set up makes restarting payments much easier after your payment holiday.

Please bear with us and avoid calling in to check on progress. Rest assured we have your application and you’ll hear from us soon.

Ready to apply?

You must have consent from everyone named on the mortgage.

Your mortgage might be through one of our subsidiaries. If so, you should contact them directly:

Mortgages with The Mortgage Works, DHLL, or EMEX

Mortgages with UCB

Other questions you might have

We’ll send a letter to you before your payments are due to restart confirming the start date and the amount of your new payment.

No, please leave this in place so we can restart your payments easily at the end of your payment holiday.

No, you won’t need to provide anything. By submitting your application you’re confirming that your finances have been impacted by coronavirus.

When your payment restarts, we’ll only collect your contractual payment.

If you’d like to continue making overpayments, you’ll need to set an overpayment back up.

Find out how to set up an overpayment.

At this time, our coronavirus payment holiday can be offered for a maximum of 3 months.

We’ll continue to monitor the situation and help our members as best we can.

Check back here for updates to our coronavirus mortgage payment holiday.

If your mortgage was taken out before 3 March 2010 it may offer payment holidays as a feature (subject to eligibility). If you do have this feature, you can apply for a normal payment holiday or a coronavirus payment holiday.

A coronavirus payment holiday will not impact your payment holiday history. Visit our main mortgage payment holiday page for more details.

Yes, you’re able to switch. However, other conditions still apply and your payments must be up to date before your payment holiday starts.

If you’re on a tracker deal, or one of our variable rate products, you’ll be able to switch while on a payment holiday as long as you’re eligible.

If you are on a fixed rate deal, you can still switch to another product while on a payment holiday but remember to consider any Early Repayment Charges that may apply.

Find out more about switching your mortgage.

Please note: on your rate switch application, the offer you receive will not show your payment holiday, or account for it in the values provided.

Yes, don’t worry, you can still apply.  

Your arrears balance won’t increase during the payment holiday but you’ll need to think about how to repay the arrears at the end of your payment holiday.  

So you know: you can not switch to a new mortgage deal if you were in arrears before starting your payment holiday.

Yes, you’ll need to take all 3 months together.

If you’re unable to afford the increased payments following the mortgage payment holiday, our Money Worries team may be able to help.

The terms and conditions sent out also apply to other types of mortgage payment holiday and are not tailored to the coronavirus payment holiday. This means some terms won’t apply to you. These include:

  • Letting: If your property is already being let, this can continue while you are on your payment holiday.
  • Changes in your circumstances: there is no need to update us on any changes in your circumstances.
  • Estimated property value: we have not taken your property value into account when agreeing this payment holiday so your Loan to Value may be above 80%.
  • Length of payment holiday: If your mortgage offers a payment holiday feature, the eligibility and terms of that aren’t impacted by a coronavirus payment holiday.

That’s no problem. Please contact our Mortgage Support on 03457 30 20 11 if you’d like to cancel your payment holiday.

Coronavirus (COVID-19) help and support

We’re here to help if you have any worries regarding coronavirus whether it’s money, managing your accounts, getting to branch or fraud.