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Coronavirus: Applying for a mortgage payment holiday

If you’re worried about paying your mortgage while the pandemic continues, we’re here to help. We are offering three-month payment holidays, which may make it easier for you to manage your mortgage if you are struggling.

What is a payment holiday?

A payment holiday is an agreement for you to take a break from paying your monthly mortgage payment. The payments you miss will need to be paid back, but how and when depends on your individual situation. 

Payment holidays don’t affect your credit rating, and are available for residential and buy-to-let mortgages. Landlords with tenants who are struggling because of the pandemic can use a payment holiday to pause rental payments.

You are able to take a total of six months’ payment holiday on your mortgage. You can apply for a payment holiday of up to three months, plus an additional extension of up to three months afterwards if you need it.

If you have already taken six month’s payment holiday and still need support, or if you are not sure a payment holiday is right for you, we do have other options available to help take the pressure off during this tough time. To talk about your circumstances and what could be best for you, call our Mortgage Servicing team on 0345 319 1200.

How do I apply for a mortgage payment holiday?

Call our Mortgage Servicing team on 0345 319 1200. Our opening hours are 8.30am to 6pm Monday to Friday. We will ask you some questions to understand your situation, and explain what the payment holiday will mean for you.

  • Complete this form and one of our specialists will give you a call – we aim to get in touch within seven days.
  • Email mortgageservicing@metrobank.plc.uk and we will reply as soon as possible. Please include your eight-digit mortgage account number, which starts with a 4 and can be found on any letter you have received from us about your mortgage.

What happens next?

If we can offer you a payment holiday, we’ll let you know and send you a confirmation letter with all the details, including an estimate of your new monthly payment amount. If you think the new amount is too high, we can cancel your payment holiday and discuss other options.  

Remember, a payment holiday has a long-term impact on your mortgage. Although you won’t make your normal monthly payments, the interest you would have paid in that time will still be charged and added to your total mortgage balance. If you have a capital and interest mortgage, the balance won’t reduce as it normally would.

It’s a good idea to make partial payments towards your mortgage during your payment holiday, if you can afford to. This will reduce your mortgage balance and the amount you’ll need to pay back later, and you’ll pay less additional interest in the long term. You can find more information on making partial payments here.

At the end of your payment holiday, we will add the payments you’ve missed to your total loan balance and recalculate your monthly repayments. This means you will pay more over the course of your mortgage. The amount your payment increases by will depend on your mortgage balance, mortgage term and interest rate. We will send you a letter to explain all the details.

We have set out some examples below to make this clearer:


Mortgage balance: £200,000

Current Interest Rate: 4.00%

Mortgage Type: Capital and Interest Repayment

Payment Holiday Period: 3 Months

 

Before Payment Holiday

After Payment Holiday

Mortgage Term left:

15 years

14 years 9 months

Monthly Payment:

£1,474.46

£1,507.65


Mortgage balance: £200,000

Current Interest Rate: 4.00%

Mortgage Type: Interest Only Repayment 

Payment Holiday Period: 3 Months

 

Before payment holiday

After payment holiday

Mortgage Term left:

15 years

14 years 9 months

Monthly Payment:

£666.67

£673.33


What happens at the end of my payment holiday?

There are options available to you when your payment holiday ends, if you feel the higher monthly payment is unaffordable to you or if you want to reduce the long-term impact on your mortgage. These include:

  • Extending the term of your mortgage, so your monthly payment stays at an amount you can afford
  • Repaying the missed payments and the interest accrued during the payment holiday, in one lump sum or spread across monthly amounts.
To discuss these options, call our Mortgage Servicing team on 0345 319 1200 or email mortgageservicing@metrobank.plc.uk.