Skip to main content

You are here:

 
  1. Home
  2. Existing Customers
  3. Payment Holidays

Payment Holidays

As the impact of coronavirus is felt across the UK, you may be worried about how it could affect you and your home. Your peace of mind is still our top priority, so we've created some extra ways to help, if you need it.

If the coronavirus has affected your income, you may wish to take a mortgage payment holiday but you should only apply if you are experiencing difficulties in making your mortgage payments.

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 can ask to take a break of up to a maximum of three months if you have been impacted through coronavirus.

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 by making a lump sum payment. But don't worry, before your payments are due to restart we will write to you with more details and give you all the options available.

An example of how your monthly payment and total amount payable would change based on taking a repayment holiday for three months:

Current outstanding mortgage balance

£100,000

Interest rate

2.75%

Term remaining

20 years (repayment mortgage)

Current monthly payment

£542

New monthly payment after payment holiday

£551

Monthly increase

£9

Total amount to repay without repayment holiday

£130,120

Total amount to repay with a three month repayment holiday

£130,605

What other options are available?

If you don't feel a payment holiday is right for you there are other changes that you can consider including:

Can I take a payment holiday?

You can apply for a payment holiday if:

  • your mortgage payments are up to date.
  • If you are behind with your mortgage payments 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?

Mortgage payment holidays can help with temporary reduction in outgoings. However, your mortgage balance will increase and you will pay more over the term of your mortgage. So, it's important that you only apply if you're currently having difficulties making your mortgage payments.

If you still want to apply, we're currently dealing with a much higher number of phone calls than usual, so you may find it quickest to ask for a payment holiday by using our online form.

Request a payment holiday

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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.

Security and privacy policy

© 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.
To contact the FCA Consumer helpline, please ring 0800 111 6768 or visit moneyadviceservice.org.uk/.