A payment holiday is where you can apply to take a break from paying all or part of your usual monthly mortgage payment but you have not made any earlier overpayments against which you can underpay.
For some customers, payment holidays may have previously been referred to as Instalment breaks.
Subject to an application meeting the criteria, payment holidays are available for a period of one or two months and you can take a payment holiday once every three years. The maximum number of payment holidays is six monthly payments over the life of the mortgage.
Payment holidays are available for a variety of reasons, usually to assist with a temporary change to your circumstances, like a change in employment or unexpected or unforeseen vehicle or household expenditure.
You may be eligible to apply for a payment holiday if:
Although we try to help as many customers as possible, there will be some cases where a payment holiday may not be available to you. These include the following:
If you think you would be eligible for a payment holiday, applying is easy just call us on 0845 603 1637, lines are open 8am to 8pm Monday to Friday, and 9am to 4pm on Saturdays.
Although payment holidays can help in the short term, if you have a repayment mortgage at the time of the payment holiday the interest will continue to be added to your mortgage and the missed payments will need to be made up over the remainder of the mortgage term, meaning that your contractual monthly payment will increase. If any or all of your mortgage is on an interest-only basis while you are not making your full monthly mortgage payment the interest due will be added to your mortgage balance. This means that the balance will increase and will need to be repaid at the end of your mortgage term, so it’s important to regularly check that your repayment plan is on track to provide the increased amount of money you will need to repay your mortgage at the end of the term.
We will confirm your new increased monthly mortgage payment approximately 2 weeks before the end of a payment holiday.
Switching to a new mortgage deal is not permitted during a payment holiday. Remember, if you don’t keep your mortgage up to date, you could fall in to arrears and ultimately lose your home.
