What happens after a Mortgage Repayment Deferral ends

If you made the decision to have a payment deferral on your mortgage because you had been affected by Coronavirus (COVID-19) we will write to you before your mortgage payments are scheduled to resume to let you know your new monthly repayment and mortgage balance and what options you have to repay the monies which were owned because of the payment deferral.  

If you can afford to resume your full monthly repayments it is in your interests to do so.

If you are concerned that you will not be able to afford your monthly repayment

Residential Mortgages

If you were up to date with your mortgage payments when you requested a payment deferral and your financial circumstances have changed and you are concerned about resuming your full monthly mortgage payment we're here to help. You can request a further mortgage deferral and to help you understand the impact of taking a further mortgage deferral, please follow the link below for the Mortgage Payment Deferral calculator. If a mortgage payment deferral is still right for you, follow the simple instructions and questions so that we can help you further. Alternatively you can call us on 0800 220 568.  We'll still need the information and it might be easier to follow the link in the first instance as we have been experiencing higher than normal call volumes during the Covid-19 crisis.

Buy to Let Mortgages

The process of further assistance for borrowers with Buy to Let mortgages is the same.  However it is important to note if your tenants are having difficulty in paying their rent due to Coronavirus. Please make sure that where a further Payment deferral is agreed, where no payments have to be made for up to 3 months, a similar arrangement is applied by you to your tenant. 

If you were in arrears before the payment deferral

If your mortgage was already in arrears when you requested a payment deferral please make contact with us on receipt of your letter.  At this point we will go through the options that are available, ensuring the best solution is found, taking into consideration you individual circumstances, we may ask for more information from you at this point.

Extending the Payment Deferral period

If you decide your best option is to extend your payment deferral period, it is important to remember that this is a Payment Deferral or Partial Payment Deferral which means you would be deferring some or all of your mortgage payments for a set amount of time (up to a maximum of 3 months). You will still owe these payments, interest will continue to be charged throughout this time and will still need to be paid at a later date     

We have provided a Mortgage Payment Deferral Calculator for you to see the potential effect of an additional payment deferral and if needed you can submit a request for an extension to your deferral. 

Please note that online calculators are intended to give an illustration of what your new monthly repayment might be and what the extra cost of the repayment deferral might be over the remaining term of the mortgage. They are not 100% accurate and therefore will not reflect what your actual payment will be or what the exact amount extra that will be repaid over the remaining term.  

Please remember it is always in your best interest to pay something towards your mortgage if you can and if you would like to apply for a partial payment deferral, please contact us to discuss this.  

If you ultimately decide to repay the amounts owed, as a result of the payment deferral, over the remaining term of the mortgage this means you will pay more over the lifetime of the mortgage compared to an alternative means of repaying these amounts, such as in a lump sum.

Whilst in respect of any payment deferral, a worsening status will not be reported to a customer’s credit file, lenders may take into account other information when making future lending decisions, including, for example, information provided by applicants or bank account information 

If you are unsure about what you can afford to pay or need some advice you can visit The Money Advice Service which has published advice about payment deferrals.  

Other options available to minimise the change to your monthly repayment and/or to repay the monies owing from the payment deferral

The following options are available:

Make a lump sum payment

You might have taken a payment deferral ‘just in case’. If this is the case and you didn’t suffer any financial hardship or you were not as badly affected as you might have thought, it would benefit you to repay the amount in full as soon as possible. The amount owed is currently being included in your mortgage balance and accruing interest and will continue to do so until the point that it is repaid

Request an extension to your mortgage term

There could be an option to extend the term of your mortgage by the same number of months that the payment deferral applied for. This option would not be automatic and would depend on us carrying out some underwriting checks to make sure that was a viable option for you including taking in to account your chosen retirement age. You will pay more interest over the term of your mortgage.

Repay the amount over a shorter term

We can work together to agree an arrangement to repay the amount owed over a shorter time rather than over the remaining term of the mortgage. This will mean you are not paying more than you need to over a longer period of time, and pay less interest overall over the term of the mortgage. The amount owed is currently being included in your mortgage balance and accruing interest and will continue to do so until the point that it is repaid

When should I apply?

You may not need the further payment deferral immediately and should consider when the right time is for you. If and when you decide to go ahead, the interest will accrue in the deferral period and you’ll need to make up deferred payments in the future. Whilst in respect of any payment deferral, a worsening status will not be reported to a customer’s credit file, lenders may take into account other information when making future lending decisions, including, for example, information provided by applicants or bank account information

What happens when the further payment deferral ends?

We’ll contact you before the end of your further payment deferral and together we’ll come to an arrangement to repay the interest charges incurred and to make up payments that have been deferred.

Usually it makes financial sense to pay these off as quickly as possible, if you are able to.  If the interest and deferred payments are repaid over the remaining term this will generally lead to you paying much more than if you had paid them off over a shorter time.

We’re here to help

If you’re already experiencing financial difficulty and are behind on your mortgage repayments, there may be other steps we can take to help you, so please talk to us about how we can help.

As you can appreciate we’re experiencing very high call volumes at the moment as we talk to members who need to arrange an immediate payment deferral.

When you’re ready to apply for a payment deferral please get in touch by following the link below or by calling us on 0800 220 568.

We might take a bit longer to get to you at the moment as we work hard to help all of our customers in these unprecedented times. 

Thank you for your patience and best wishes for you and your family’s safety

 

Mortgage Repayment Deferral Calculator 

Please note that this calculator performs best when using Google Chrome as your browser 

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