Payment holidays and payment deferrals
We are changing the way we refer to taking a break from your mortgage as a result of coronavirus from ‘payment holidays’ to ‘payment deferrals’. This is to help our customers understanding of the implications of a payment holiday i.e. that payments are being deferred and not waived. You’ll see these changes reflected throughout our website.
If you’re concerned about making repayments on any residential or buy to let property as a result of the current coronavirus (COVID-19) situation, we’re here to support you.
What is a mortgage payment deferral?
It’s a period of time agreed with your lender where you can stop paying all or part of the payments on your mortgage.
It is important to note that as you are not making mortgage payments during this time, your balance will not reduce but your mortgage term will continue to reduce as normal. As no payments are being made, your mortgage balance will increase each month and additional interest charges will be incurred on a daily basis at your current mortgage interest rate. As a result, your monthly mortgage payments may increase once the payment deferral period has ended. We will write to you before the end of your payment deferral to confirm your new monthly payment amount.
Your credit file will not be affected from taking a payment deferral, but you should be aware that mortgage providers may enquire into things such as your payment history and take them into account when considering new applications.
This is not the same as any payment holiday that may be available as a standard feature of your mortgage, which requires a surplus of mortgage payments (overpayments). Your Mortgage Offer will confirm if this type of payment holiday is available to you.
Is taking a mortgage payment deferral the right option for me?
If you’ve been financially impacted by the current coronavirus (COVID-19) situation, you can request a mortgage payment deferral of up to three months.
Before requesting a mortgage payment deferral there are some things you need to bear in mind to make sure it’s right for your current needs.
It’s important to remember that this is a Deferred Payment or Partial Deferred payment which means you would be deferring some or all of your mortgage payments for a set amount of time. You still owe these payments, interest will continue to be charged throughout this time and will still need to be paid at a later date.
Your mortgage balance will increase as a result of a payment deferral and therefore the interest you pay will also increase. Additionally, your payments after the deferral will increase.
If you are still currently working and able to maintain your full monthly mortgage payments, you should continue to do so.
Payment deferral impact calculator
Please note that online calculators are intended to give an illustration of what your new monthly payment might be, they are not 100% accurate to your circumstances and do not reflect what your actual payment will be.
You can visit The Money Advice Service to find impartial advice and guidance on payment holidays (deferrals), and use their Money Navigator Tool to find helpful guidance which is personalised to your financial needs, and highlight areas where you should consider taking action now to avoid money problems in the future.
How do I request a mortgage payment deferral?
Email us to request the payment deferral. We’ve set up a dedicated email PaymentHolidayRequests@skipton.co.uk for customers to request a mortgage payment deferral of up to 3 months.
If you’ve already taken a mortgage payment deferral and are looking to request an extension, please don’t email us on the above address. Instead visit our Your options after a mortgage payment holiday (deferral) page to find out what options you have available when your payment deferral ends.
By emailing us, you are confirming that you have all of your co-borrowers’ consents to this payment deferral request. In the email please make sure that you provide:
- your mortgage account number
- how long you wish the payment deferral to be for – 1, 2 or 3 months
- the best number for us to contact you on, if we need to.
It is important to include your account number as this will avoid delays in processing your request. If you don’t have your account number, please include your address and postcode.
As you can imagine we’re extremely busy processing requests, so please bear with us and avoid calling to check on progress. If you've emailed the above email address please rest assured that we have your request and you’ll hear from us soon.
What happens next?
Once we’ve received your email, we’ll be in touch to either confirm your request or to discuss your individual circumstances further.
If your next mortgage payment is due in the next 7 working days, your payment deferral may not start until the following month and this will be confirmed in our response.
In the meantime, leave your Direct Debit in place if you have sufficient funds to cover your regular monthly payment. Once the deferral is approved we will temporarily suspend your Direct Debit. You can also make a payment by bank transfer using our bank details.
What happens after my mortgage payment deferral?
If you have a mortgage payment deferral in place, we'll recalculate your monthly payment in the final month and will write to let you know what your new monthly payment will be. You'll also have some options to choose from if you want to minimise the change to your monthly payment, or if you're worried you won't be able to afford to restart your payments.
You can find more detail on our Your options after a mortgage payment holiday (deferral) page, but please bear in mind that things might change and we can't look at specific options with you until your payment deferral is coming to an end.