If you have a variable rate mortgage, then the outstanding amount from your payment holiday will be spread across your remaining term and your repayments after the mortgage holiday period will increase as a result.
This webpage is for those requesting a mortgage payment deferral for the first time. If you already have a mortgage payment deferral we’ll write to you with details on what happens next. If you’ve received your letter and would like to request further support please let us know on our Payment Deferral Review page.
What is a mortgage holiday payment?
A payment holiday (also known as a payment deferral) is a short break from paying your mortgage.
If you think you’ll struggle to make your monthly mortgage payments because of coronavirus, we can help by offering you a payment holiday of up to three months.
While your monthly payment changes to zero, interest continues to build at your usual rate. This means that your loan balance will increase and you may have to pay back more than if you’d not taken out a holiday.
You can apply for a payment holiday if;
- you have a residential or a Buy-to-Let mortgage with us
- you'll struggle to meet your usual repayments due to being impacted by coronavirus
- you have consent from everyone named on your mortgage
- you’re up to date with your monthly payments (if you have fallen behind in your repayments but have been impacted by coronavirus please speak to us).
Is a payment holiday the right option for me?
A payment holiday is a temporary break from your repayments to help you through these uncertain times. If you haven’t already had a payment holiday on your mortgage, you can apply below. If you have already had a payment deferral, including an interest only period or part repayment period, and need further support, please visit our Payment Holiday Review webpage.
There are a few things to consider before applying for a payment holiday, to make sure it’s right for your situation:
- A payment holiday is a short term support. If you feel that you will need longer term support, or you’re worried about starting your payments again in three months’ time please speak to us.
- If you are not up to date with repayments on other products that you have with us, for example your credit card or personal loan, speak to us.
- If you are a Buy-to-Let landlord, it is expected that you pass the relief from your payment holiday onto your tenants. If you are not in a position to do this, please contact us to discuss other options available to you.
- If you have multiple Buy-to-Let mortgages with us, an adviser may be in touch with you to get extra information to complete your application and discuss your options.
Contact us on 0345 600 2882.
Please be aware that if you need independent support regarding your mortgage, you can get help from Advice NI, Housing Rights NI or other debt counselling agencies.
If you have money worries
If you’re not sure what to do, or need help to sort out any money worries that you may have, you can get free, independent advice from Advice NI, Housing Rights Service or other debt counselling organisations. If you would like to find out more about these services, please visit our Customers in Financial Difficulty.
For help on how to prioritise your debts, the Money Advice Service has a guide on how to prioritise your debts .
If you would like money guidance or if you are considering whether another payment deferral on your mortgage is right for you, the Money Advice Service Navigator Tool and the FCA information page Dealing with Financial Difficulties during the Coronavirus Pandemic will help you access the right information.
What impact will a payment holiday have on my future monthly payments?
While no monthly payment will be taken during the holiday, 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.
We’ll need to recalculate your payments over your remaining term, taking this increase into account.
The amount your payment will increase depends on your mortgage balance, mortgage term and interest rate.
Here are some examples of how mortgage payments could change after taking out a three month payment holiday.
If you have a variable rate mortgage
If you have a fixed rate mortgage
If you have a fixed rate mortgage, there will be no change to your fixed payments after the payment holiday, unless you contact us to change to advise that you would rather repay it during your fixed rate period. If you do not change this arrangement and you move on to a reversionary rate (SVR or Danske Follow-on Rate) after your fixed rate period ends, then these payments will be higher than shown in your original mortgage agreement.
What happens when the payment holiday ends?
Towards the end of the payment holiday, we will write to you to confirm that the payment holiday is ending. If you are not able to resume full repayment of your mortgage at that stage, we will discuss other options with you and agree next steps. We can also discuss other options for repaying the amount owed from your payment holiday, for example making a lump sum repayment.
How quickly is a mortgage payment holiday request processed?
Where we can, we’ll start your next payment holiday from your next payment. However, if your next payment is due in the next three to five working days, your payment holiday may start the following month.
If your payment is due in the next few days and you will have difficulty making it, please contact us on 0345 600 2882.
Unfortunately we can’t process requests for payment holidays to start beyond your next repayment, as they should generally commence immediately. Please only apply if you want the payment holiday to start with your next mortgage repayment. Please contact us if you would like to discuss this.
What happens once I apply?
We’ll write to you with further details and to confirm when your payment holiday will start. You will need to cancel your standing order for your mortgage payment if you pay from another bank.
Will my credit rating be affected by taking a payment deferral?
If you have received mortgage support in line with the FCA and Government’s Mortgage and Coronavirus scheme, there has been no impact on your credit rating as a result. Under this scheme, you can avail of up to two payment deferrals and this may have included payment holidays, interest only periods and part repayment periods. However, lenders may take into account a range of factors when making credit decisions in the future including, for example, information provided by applicants or bank account information.
If you need a third payment deferral, this may be reported on your credit file and may impact your credit rating and ability to obtain credit in the future.
How long will the payment holiday option be available?
In order to assist customers during the Coronavirus pandemic and lockdown, the Government and FCA implemented a scheme that allowed customers to ‘self-certify’ that they were financially impacted by Coronavirus. This allowed us to grant a payment deferral without completing a review of a customer’s financial circumstances.
The FCA has advised that this scheme and the guidance that underpins it will expire on 31 October 2020. This means that, after 31 October 2020, we will no longer be able to accept applications on a self-certification basis. Don’t worry though, we will still be able to help you- the only difference will be that you will undertake a review of your situation with one of our advisors.
What other options do I have if I don’t want a payment holiday?
If a payment holiday isn’t right for you there are other options available:
With a Capital Moratorium you’ll pay interest only payments for a period of up to six months, meaning you won’t be reducing the amount you owe. This would reduce your mortgage commitment each month, but will still allow you to continue to pay the interest portion of your mortgage.
Or you can make partial repayments instead of taking a payment holiday. This means you will still cover the interest portion of your mortgage repayments and reduce the amount you owe by making smaller reductions to the amount you owe.
To discuss these options please contact us on 0345 600 2882 to make an appointment with one of our advisers to assess the right option for you.
If you’ve already got a mortgage payment holiday and would like to let us know you are able to resume your repayments or request further support, please don’t use the form below but let us know on our Payment Deferral Review page. If you proceed to complete this form, another payment holiday will not be added to your mortgage.Apply for a mortgage payment holiday