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What happens after a payment holiday?

When your payment holiday ends, the amount you pay each month may go up. This new monthly amount is due to interest charges and payments you missed while you took a break. We'll write to you before the end of your payment holiday to confirm your new monthly amount.

My Payment Holiday has ended and I can make the payments now

My payment Holiday has ended and I need further support

If you don't need any further support as a result of Coronavirus, we have a couple of options to help get your mortgage back on track:

Keep your new monthly payment amount

When your payment holiday ends, you can choose to continue to pay your new monthly amount and spread the cost across the rest of your mortgage. If you do this the total amount you pay back on your mortgage will be more as interest will be charged on a higher mortgage balance.

If you pay by direct debit - you don't need to do anything. We'll change the amount you pay each month and collect it as usual when it is due.

If you cancelled your direct debit - you'll need to set up another one to cover your new monthly amount, before your next payment is due. Please use our online form to ask us to set it back up for you, using the same bank details as before. If you want to change the date you pay, or the account you pay from, please contact us on 0345 300 2627 to do this.

If you pay by standing order - you'll need to restart your monthly payments before the next one is due. It's important to remember to do this to make sure your account doesn't fall into arrears.

Overpay to get back on track

When your payment holiday ends you may want to overpay your mortgage to cover the payments and interest charges that you missed.

You decide how much you wish to overpay.

And to help you get back on track, as a special concession you won't have to pay an early repayment charge on the overpayments you make.

If you've missed payments before your payment holiday began, any overpayments will clear these first.

When you've finished making your overpayments you can ask us to work out your new lower monthly payment amount. If you don't request your new amount, your monthly payments will be the same as before you overpaid. Your monthly mortgage payment will only be recalculated the next time we need to do it, for example, following a Bank of England Base Rate change.

You can overpay in two ways:

Overpay a lump sum

A lump sum overpayment is an extra payment made on top of your usual monthly mortgage payment. It will reduce your mortgage balance and save you interest.

See how to set up a lump sum overpayment

Example of how a lump overpayment would reduce your balance and save you interest:

Before overpayment After overpayment
Mortgage balance after payment holiday £100,000 £99,000
Interest Rate 2.75% 2.75%
Monthly Payment £542 £537
Term remaining (Repayment Mortgage) 20 years 20 years
Total Amount Payable £130,121 £128,820

In this example, a lump sum payment of £1,000 has reduced the total amount payable by £1,301.

If your lump sum payment is £1000.00 or more in addition to your normal monthly repayment we will automatically calculate a new mortgage payment for you and will write and confirm this to you.

If you would like any further information please give us a call.

Make a regular overpayment

A regular overpayment is where you choose to pay more each month than your required monthly payment amount. They will reduce your mortgage balance and save you interest.

See how to set up a regular overpayment

Examples of how a regular overpayments would reduce your balance and save you interest:

Before overpayment After overpayment
Mortgage balance after payment holiday £100,000 £100,000
Interest Rate 2.75% 2.75%
Monthly Payment £542 £592
Term remaining (Repayment Mortgage) 20 years 17 years 10 months
Total Amount Payable £130,121 £126,630

In this example, an extra £50 overpayment per month reduces the mortgage term by 2 years and 2 months and the total amount payable by £3,490.

If your regular overpayment is £1000.00 or more in addition to your normal monthly repayment we will calculate a new mortgage payment for you and will write and confirm this to you.

Your contractual term would not change and the example assumes there are no interest rate changes.

If you would like any further information please give us a call.

How to set up an overpayment:

Some mortgage products have an early repayment charge if you overpay by a total of 10% or more of your outstanding balance in any year.

If a charge is applicable this will be shown either on your mortgage offer or on a transfer authority form if you changed mortgage products after your account started. If a charge applies this can either be added to your account or you can make a payment to cover it.

Making a lump sum overpayment:

The lump sum payment can be paid via your bank. Our bank details are:

Lloyds Bank
Sort Code: 30-02-50
Account code: 04968773
Account Name: Birmingham Midshires

Please ensure the payment reference states:

Mortgage account number
Customer surname (if reference field allows)
International payment details:
GB70 LOYD 3002 5004 9687 73

Setting up a regular overpayment:

You can set up regular overpayments by standing order from any bank using:

Lloyds Bank
Sort Code: 30-02-50
Account code: 04968773
Account Name: Birmingham Midshires

Please ensure the payment reference states:

Mortgage account number
Customer surname (if reference field allows)

If you pay by Direct Debit, you can set up regular overpayments by using our online form.

Switch to a new rate

To switch to a different product or if you need advice on your BTL mortgage contact your Broker or an independent financial adviser.

To discuss your Residential mortgage options call us on 0345 300 2627

Request to extend your term

If you have a repayment mortgage and you need to reduce your monthly payments, you could apply to extend the remaining term of your mortgage.

Example of increasing your term by 6 months:

Before term extension After term extension
Mortgage balance after payment holiday £100,000 £100,000
Interest Rate 2.75% 2.75%
Monthly Payment £542 £532
Term remaining (Repayment Mortgage) 20 years 20 years 6 Months
Total Amount Payable £130,121 £130,936

In this example, the term is increased by 6 months. The estimated monthly payment is reduced by around £10 and the total amount payable increases by around £815. This assumes all future payments are paid and no change in interest rates.

Example of increasing your term by 18 months:

Before term extension After term extension
Mortgage balance after payment holiday £100,000 £100,000
Interest Rate 2.75% 2.75%
Monthly Payment £542 £514
Term remaining (Repayment Mortgage) 20 years 21 years 5 Months
Total Amount Payable £130,121 £132,571

In this example, the term is increased by 18 months. The estimated monthly payment is reduced by around £28 and the total amount payable increases by around £2,450. This assumes all future payments are paid and no change in interest rates.

You can request a term extension of up to 18 months quickly and easily by completing our online form. It should only take a few minutes. By completing and submitting the form you are agreeing to continue without advice. We'll work out the term extension you need after you submit your request. If you'd prefer to speak to us or you think you might need a term extension of longer than 18 months, please contact us to discuss your options.

Request a term extension

For extending the term we do have a maximum term and age we can go to. In some cases income details may be required to show you can support the mortgage to the proposed end date. For further information about this contact us on 0345 850 0827.

Take another payment holiday

We're helping our customers deal with the coronavirus outbreak and can offer initial payment holidays for 1, 2 or 3 months. If at the end of the payment holiday you need further support, you can apply for an additional 1, 2 or 3 months up to a maximum of 6 months in total.

If you have not taken six months payment holidays, then you can request another payment holiday - just ensure the total you have taken isn't more than six months. Use our online Covid Support tool to request a further payment holiday.

Other financial assistance and support

If you have taken a payment holiday and you are still worried about making your monthly mortgage payments then call us on 0345 300 2627 to discuss the options available to you.

If you are experiencing or facing into long term financial difficulty there may be other ways we can help which might be more suited to your circumstances, speaking to someone will help determine this.

Call us on 0808 145 0369 to speak to one of our specialist advisers.

Whichever option you choose we strongly recommend you talk to us so we can make sure you're getting the support you need.

For telephone line opening times, please read the information in our contact section. Calls may be monitored and recorded for security and training purposes.

Our tracker rate mortgages are linked to Bank of England Bank Rate (also known as Bank of England repo rate). Details of this rate can be found on the Bank of England website or in the Financial Times or other leading newspapers.

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© Birmingham Midshires

This site is intended for UK residents unless otherwise stated. Mortgage Loans will be made by Birmingham Midshires.
Birmingham Midshires is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh, EH1 1YZ.
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