In its package to help people who have had their circumstances changed as a result of Covid-19, the Chancellor announced a series of measures to alleviate the financial impact of losing a job or self-employed income.

 

Mortgage Payment Holidays

 

One of these was the option to take a mortgage payment holiday. But what is it and how does it work? We’ve created a guide that explains it in more detail. The first thing to say is that calling it a holiday isn’t strictly true. The payment holiday was originally designed for customers who had fallen on hard times and couldn’t afford their monthly mortgage. The Lender would talk through the customer’s circumstances and then agree, if there was a way forward, to suspend the direct debit for three months whilst the customer sorted themselves out. In the background, the lender would add the missed payments, plus the interest payable onto the mortgage and then when the payments started again, the monthly amount would be higher to take into account in the increased in the mortgage. The customer’s credit report would show three missed instalments and therefore the payment holiday would have a negative impact on the customer’s ability to obtain credit in the future certainly at high street prices.

 

What has changed?

 

To have a payment holiday under the COVID-19 measures, you don’t need to be financially distressed and the link between your payments or should we say lack of them with a credit referencing agency is broken. This means that there should be no impact on your credit score if you choose to take a holiday. Instead, your mortgage payments after the 3-month holiday will go up to make sure you repay the mortgage amount plus any interest in full.

 

A word of warning

 

If you are coming to the end of a fixed rate or other such mortgage deal, a time when your mortgage would normally drop back on to a higher rate of interest, then normally your lender would offer you another deal to encourage to keep your mortgage with them.  This is sometimes called a rate switch or product transfer and is normally a similar rate of interest to what you would be have been paying under your current deal.  However, some lenders are not in a position to offer the new lower rate if you are currently taking a payment holiday. You could attract a higher rate of interest on your outstanding loan which is then added to your mortgage and not be able to do anything about it. So, when it comes to your payment holiday, timing is everything. Of course, if you choose to take a payment holiday and then cancel your direct debit you run the risk of defaulting on your mortgage which is a risk that could damage your ability to obtain a competitively priced deal in the future.  

 

Talk to an expert

 

Taking a payment holiday is a decision which should not be taken lightly, if the implications are not understood then over time it could end up costing more money than it looked to save in the first place.  Talk to us and we can help you understand what a payment holiday means for you and when would be the right time.  And, if it’s something you still want to do, how to go about requesting a suspension of your mortgage payments from your current lender – each has their own way of doing things and different turnaround times. So, the message is simple, act if you need to, make sure your take expert advice first, and let us help today so you have the right result every time.

 

How to request a Payment Holiday

 

We’ve put together a list of all the major lenders along with a link to how to contact them to request a payment holiday.

 

Payment Holidays: Last updated 07/04/2020 – 16:36
Lender payment holidays
Lender Current Stance Process Product Transfers allowable? Change to Interest Only
Accord Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more information Yes Case by case
Aldermore  Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more information No Yes
Ahli United TBC TBC TBC TBC
Bank Of Ireland / Post Office Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here and complete the online form for a call back TBC Yes
Barclays Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to complete the online form Yes, but must do this before requesting the payment holiday Case by case
Bath BS Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here or use to the online live chat facility to request Yes Yes
Beverley BS Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 01482 881510 or click here to request a call back N/A TBC
Bluestone Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more details N/A  N/A
BM Solutions Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 0345 300 2627 Option 5, Option 2, Option 1 (specific to payment holiday) TBC No
Buckinghamshire Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email to request holiday No Yes
Cambridge Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 0345 601 3344 to discuss Yes Will consider each application
Central Trust  Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more information  No No
Chorley Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email to request a call back Case by Case  Case by Case
Clydesdale Yes, 3 month payment holiday available for customers affected by Coronavirus Please use the following link for contact details TBC TBC
Coventry Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to complete the online form to request a call back  Yes No
 Cynergy Bank TBC TBC TBC TBC
Coutts TBC TBC TBC TBC
Danske Bank TBC TBC TBC TBC
Darlington Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email – title email ‘Payment holiday’ and provide all account details TBC  TBC
Digital Mortgages  Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more information No No
Dudley Yes, 3 month payment holiday available for customers affected by Coronavirus Please call: 01384 231414 or click here to email. No No
Earl Shilton Yes, 3 month payment holiday available for customers affected by Coronavirus  Please call 01455 844422,or click here to request a call back Customer can extend existing product Yes
Family BS Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back Yes Yes
First Trust Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 02890821670 or click here to email Yes Yes
Fleet Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for full details N/A  N/A
Foundation Yes, 3 month payment holiday available for customers affected by Coronavirus Applicant to call – 0344 770 8030  N/A TBC
Furnace Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more details TBC TBC
Gatehouse Bank Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back N/A TBC
Halifax  Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back TBC No
Hanley Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 01782 255000, option 6 or send this form Yes Yes
Harpenden Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 01582 463133to discuss this further Yes  Yes, as long as normal term date can accommodate PT rates, then the client can continue
Hinckley & Rugby BS Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back Yes Case by Case
Hodge BTL Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email or call 0800 138 9109 to discuss No Yes
Hodge Lifetime Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more details No No
HSBC  Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request payment holiday Yes Case by Case
Interbay TBC TBC TBC TBC
Investec TBC TBC TBC TBC
Ipswich TBC TBC TBC TBC
Ipswich BS Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email or call 0330 123 0773 to discuss TBC TBC
Kensington Yes, 3 month payment holiday available for customers affected by Coronavirus  Please call 0333 300 0921 to discuss further Apply as remortgage Case by Case
Kent Reliance Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back Yes No
Keystone TBC TBC N/A TBC
L&G Home finance Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more details  N/A N/A
Landbay  Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 0330 053 6825 to discuss further No No
Leeds BS Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more information TBC TBC
Leek United Yes, 3 month payment holiday available for customers affected by Coronavirus Please call one of the following numbers – Consumer 0808 169 6680 Brokers  0808 281 9309 Yes Yes
LendInvest     Not Applicable  
Lloyds Banking Group Yes, 3 month payment holiday available for customers affected by Coronavirus Halifax – Please click here to request holiday Yes Yes
BM Solutions –  Please call 0345 300 2627 Option 5, Option 2, Option 1 (specific to payment holiday)                                                
Scottish Widows – Please call 0800 001 5145
 
LV= Not Applicable Not Applicable Not Applicable Not Applicable
Marsden Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 01282 440 500 to discuss Case by case No
Mansfield TBC TBC TBC TBC
Masthaven Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 0207 036 2012 or click here to email to discuss futher Yes Yes
Melton Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 01664 414141 to discuss Yes Yes
Metro Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 0345 319 1200 to discuss further Yes Yes
More2Life Not Applicable Not Applicable Not Applicable Not Applicable
Natwest Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request payment holiday Yes, once  payment holiday has been completed TBC
Nationwide Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request payment holiday Yes Case by case
Newbury Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 01635 555 700 to discuss further Yes Yes
Newcastle Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to discuss further Yes Case by Case
Nottingham Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email using the heading Covid 19 Payment Holidays and include all mortgage account details Yes Case by case
One Family TBC TBC Not Applicable TBC
One Savings Bank Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back Yes No
Paragon Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email with the heading Covid 19 payment holiday and include full mortgage account details N/A   N/A
Paragon – 2nd Charge Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for further information N/A N/A
Penrith BS Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email or call 01768 863675 (option 1) to discuss further No TBC
Pepper Money Yes, 3 month payment holiday available for customers affected by Coronavirus  Please call 03333 701 101 or click here to discuss further No No
Platform Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for further information Yes  Case by Case
Precise Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for further information Yes TBC
Principality Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here and complete the online form Yes No
Progressive Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back N/A TBC
Pure Retierment TBC TBC Not Applicable TBC
Reliance Bank Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email. Customer to email with name, postcode, account number and circumstance No Case by case
Saffron  Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for more information and to complete the online form N/A TBC
Santander Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request payment holiday Yes No
Scottish Widows Yes, 3 month payment holiday available for customers affected by Coronavirus please call 0800 001 5145 to discuss further TBC No
Shawbrook Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a payment holiday or call 0344 892 0155 to discuss. No No
Skipton Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to email and provide mortage account number and best number for return contact N/A Case by case
Stafford Railway Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 01785 223212 option 1 to discuss No Yes
State Bank of India TBC TBC  Not Applicable TBC
Swansea Yes, 3 month payment holiday available for customers affected by Coronavirus applicants to call 01792 739110 to discuss Case by case Case by case
Teachers Yes, 3 month payment holiday available for customers affected by Coronavirus Please call: 0800 378669 or click here to email.                 Each case reviewed individually Case reviewed individually.  Contact lender Case reviewed individually.  Contact lender 
The Mortgage Lender Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 0344 257 0427 and speak to the dedicated staff to discuss this N/A N/A
TMW Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request payment holiday Yes Case by case
Tipton Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back Case by case Case by case
Together Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a call back Yes No
TSB Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request payment holiday TBC TBC
United Trust Bank Case By Case Please click here to email to request call back Not Applicable TBC
Vernon Yes, 3 month payment holiday available for customers affected by Coronavirus Please call 0161 429 4306 to discuss  Yes Yes
Vida Home Loans Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here to request a payment holiday or call 0344 892 0155 to discuss. No Yes
Virgin/Clysdale Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for further information Yes Case by case
West Brom Yes, 3 month payment holiday available for customers affected by Coronavirus Please click here for further information Yes TBC
Zephyr Home Loans  Yes, 3 month payment holiday available for customers affected by Coronavirus      

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