Payment holidays

What is a payment holiday?

A mortgage payment holiday is a break from paying your mortgage. Payment holidays will not have a negative impact on your credit file. However, you should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.

You should only apply if you are experiencing difficulties in making your mortgage payments.

We are no longer offering new payment holidays but if you are currently taking a payment holiday and have not already taken the maximum allowed of 6 months, you can ask to extend it.

Additional payment holidays must start straight after your current payment holiday and finish by 31 July.

For example, if you’ve had a 2 month payment holiday that ends in April, you could ask for another payment holiday for 3 months taking you up to the end of July. You’d then make your next regular payment in August.

If you are currently on a payment holiday or part payment holiday you can only apply for another in the final month of your existing payment break.

How will this impact my future mortgage payments?

If you take a mortgage payment holiday you won’t make mortgage payments for up to 3 months. During this period interest will continue to be charged at your existing interest rate(s) and the total amount of interest you pay over the term of the mortgage will increase.

This will result in a higher mortgage balance than if you’d not taken out a holiday. At the end of your payment holiday we’ll recalculate your payments over your remaining term, taking this increase into account.

In this way, if you have a repayment mortgage the new monthly payment will ensure you repay the full outstanding balance by the end of your existing mortgage term by spreading the payments you haven’t made over your remaining term.

There may be other ways for you to repay the payments you’ve missed, for example making a lump sum payment. But don’t worry, before your payments are due to start we will write to you with more details.

What could this mean for my mortgage?

Payment holidays can help with a temporary reduction in outgoings. However, your mortgage balance will increase and you will pay more over the term of your mortgage.

Paying something towards your mortgage each month is better than paying nothing, as it will reduce the total amount you pay over the term of your mortgage. If you can afford to pay part of your monthly payment then you should. 

You can do this by taking a full payment holiday and then making the payments you can afford.

Can I take a payment holiday?

You can apply for a payment holiday if…

  • Your income has been affected by coronavirus
  • You want to extend a current payment holiday and have not already taken a total of 6 months
  • You are no more than 6 months behind with your mortgage payments.

If you are behind with your mortgage payments by more than 6 months, please visit our coronavirus/financial difficulties page for more details on how we can support you.

Where you have a joint mortgage, everyone must agree to the payment holiday.

How do I apply for a payment holiday?

It's important you understand the impact a payment holiday could have on your mortgage before asking to take a break from your payments.

If you need independent help and advice, you can find support on:

Our payment holiday calculator will show you how taking a break from your payments could affect your mortgage and how much you pay each month.

Once you have used our payment holiday impact calculator, if you still want to apply, you can use our online form to request a payment holiday.

Payment holiday impact calculator

You could lose your home if you don’t keep up your mortgage repayments