Coronavirus: Mortgage payment break
Last updated 5 November 2020
If your client thinks they’ll struggle to make their monthly mortgage payments because of coronavirus, we can help them by offering our members a three month mortgage payment break.
Is a mortgage payment break the right option?
If your clients are thinking about a mortgage payment break, it’s important to note the following:
- Interest will continue to build at their usual interest rate during the payment break. This means the total amount of interest will go up, increasing the overall cost of their mortgage.
- Taking a payment break won't affect their credit rating. But lenders may ask about payment history and take this into account when making future lending decisions.
- Once their payment break ends, your client’s will need to make payments again as set out in their mortgage terms. If they miss or make a late payment, it'll be recorded on their credit file for six years and this could make it difficult to borrow in the future.
- There might be other ways to reduce mortgage payments. Some of these may be more suitable for your client’s situation. You can see the full range of options in our Home Support Hub.
If your clients are not struggling because of coronavirus, and are still able to make their mortgage payments, then they should continue to do so.
Your client will still be able to switch their mortgage when on a payment holiday.
To see an estimate of the impact of a mortgage payment break then this independently published mortgage payment break calculator may be useful.
You’ll be directed to an external website where you’ll get a representative illustration of what your client’s future payments will look like. Actual payments and what they will repay over the term of the mortgage may differ.
Apply for a payment break
Where we can, we’ll start their payment break from their next payment. If their next payment is in the next few days, their payment break may start the following month.
Once the payment break has been applied to their account, we’ll write to them confirming the start date.
Please visit the TMW customer website to see how your client can request a payment break and for more information.
If, after applying, they decide they no longer need a payment break, they can contact our Mortgage Support on 0345 606 40 60 to cancel their payment break.
What happens when my clients mortgage payment break ends?
We’ll send them a letter before their payments are due to restart. It will confirm the start date and the amount of their new payment.
Your clients have options of what they can do next:
Pay their new monthly payments
If they normally pay by Direct Debit, they don’t need to do anything. We’ll collect their new payment amount. If they cancelled their Direct Debit, they’ll need to set it up again.
If they already pay by standing order, they’ll need to ask their bank or building society to update their standing order payment amount.
Pay more than their new monthly payment
If their financial situation has improved, they could pay back the payments they’ve missed to minimise the effect on their monthly payments. This means they’ll pay less interest long term, but it will impact their overpayment allowance on their mortgage. Any Early Repayment Charges (ERCs) they get as a result of making up missed payments will be refunded.
If they still need help
If your client already had 6 months of payment support, unfortunately, they can’t apply for any more payment breaks, but help is available if they still aren’t able to make mortgage payments. They’ll need to tell us more about their financial situation so we can call them to talk about their options and work out a payment plan.
- If they’re a buy to let customer, they can call us on 0800 212 508.
- If they’re a residential customer, they can apply for further support on our Home Support Hub.