If you are approaching the end of your payment holiday but have not yet received a letter from us outlining your options, please wait to receive your letter before completing the form below.
Your Options
The Financial Conduct Authority (FCA) guidance for consumers states that if you can afford to repay your mortgage, it is in your best interest to do so.
Whichever option you select, you will pay additional interest than if you had not taken a payment holiday. However, the shorter the repayment term, the less interest you will pay.
Your payment holiday will end and your full monthly payments will resume. Your monthly payment amount may be different than it was before the payment holiday - please see the important information section below for more information.
You will also repay the total shortfall of payments in a lump sum. As soon as you repay the shortfall, interest will stop accruing on the shortfall amount. This means that by choosing this option, you will pay less interest over the term of your mortgage than if you were to choose option 2, 3 or 4.
This option may be suitable if your financial circumstances were not as badly affected as you first thought.
Your payment holiday will end and your full monthly payments will resume. Your monthly payment amount may be different than it was before the payment holiday - please see the important information section below for more information.
The Society will add the shortfall of payments, including interest, to your mortgage balance, effectively spreading the amount over the remaining term of your loan. This is known as capitalisation.
As this option will increase your total mortgage balance, you will pay more interest over the term of your mortgage than if you were to pay the shortfall off in a lump sum.
Your payment holiday will end and your full monthly payments will resume. Your monthly payment amount may be different than it was before the payment holiday - please see the important information section below for more information.
The Society will add the shortfall of payments, including interest, to your mortgage balance, and extend the term of your mortgage by the same length of time as your temporary payment arrangement.
So, if your payment has lasted 3 months, we will extend your mortgage term by 3 months.
As this option will increase your total mortgage balance and extend your mortgage term, you will pay more interest than if you were to pay the shortfall in a lump sum or spread the balance over your existing mortgage term.
All or part of your full monthly payments will be deferred for a further three months.
Interest will continue to accrue on the deferred payments, and you will have to make up for the shortfall in the future.
This option should only be selected if you are in financial difficulty and are unable to meet your full monthly payment.
If you are unsure which option is best for you and would like more information, we can contact you to discuss your specific needs and concerns.
Important Information
Your monthly mortgage payments may be different than before you took your mortgage holiday for the following reasons:
1. We recently decreased our SVR from 5.24% to 4.74%, so if you are on a variable rate your interest rate will have also decreased. This would have the effect of decreasing your monthly payments.
2. If you have changed your mortgage product during your payment holiday, your monthly payments may have increased or decreased depending on your new rate.
3. The option you choose to repay the shortfall of payments may also affect your monthly payment amount.
If you select Option 1 and pay off the shortfall plus additional interest accrued in a lump sum, your payment holiday shouldn't affect your monthly payment amount. Your letter will state how much your updated monthly payment will be if you choose this option.
If you select Option 2, you will be spreading the shortfall over the remainder of your mortgage term, meanwhile interest will continue to accrue on the shortfall. This will have the effect of increasing your monthly payment amount. Your letter will state how much your updated monthly payment will be if you choose this option.
If you select Option 3, you will be spreading the shortfall over an extended mortgage term. The longer your mortgage term, the more interest that accrues. As the total interest accrued will be higher over the mortgage term, this will have the effect of increasing your monthly payment amount. Your letter will state how much your updated monthly payment will be if you choose this option.
If you select Option 4 and choose to extend your payment holiday, your shortfall will increase and interest will continue to accrue. Unless you can pay this off as a lump sum at the end of your payment holiday, this will have the effect of increasing your monthly payment amount.
Nothing negative will be placed on your credit file due to taking a payment holiday.
However, lenders could still become aware of your payment holiday through other methods.
For example, if lenders requested bank statements for the time period you were on a payment holiday, they would be able to see you weren't making your full mortgage payments.
This information could affect their lending decision.
If you need more help before making your decision, here are some useful resources:
- Money Advice Trust: 0800 138 7777
- National Debtline: 0808 808 4000
- Business Debtline: 0800 197 6026
- Money Advice Service COVID-19 Advice
- Stepchange Debt Charity
- Payment Holiday Calculator
You can also select Option 5 if you would like to receive contact from the Society to discuss your specific needs and concerns.
Options Form
