Having difficulty paying your mortgage? 

This is where we agree a temporary reduction in your regular monthly mortgage payment for a set period.

Depending upon your circumstances, this option may be appropriate in situations where you are experiencing a short-term reduction in your income or have an unexpected outgoing such as a tax demand, or medical costs.

Any ‘missed’ part of your regular monthly mortgage payment will accrue as payment arrears, which may impact your credit file.

Things to think about when considering a temporary reduction in your monthly mortgage payment:

• This is a short-term solution, so we'll want to review your affordability now and in the future. This helps us to understand what your options will be available to repay the arrears once the agreed support comes to an end.
• You’ll need to make up the missed payments, which will attract interest at the same rate as the mortgage until repaid.

This option is commonly known as an Arrangement to Pay (ATP). A payment arrangement to maintain your monthly payment and clear any previously missed payments.

We do this by agreeing for you to pay an affordable additional amount each month on top of your regular monthly mortgage payment until the arrears are paid off. 

Things to think about when considering an Arrangement to Pay.

• Your monthly mortgage payment will increase during the arrangement in order to clear the arrears in the agreed timescale. You need to make sure you are comfortable with the additional amount you agree to pay.
• The arrears on your mortgage will reduce by the additional monthly payments you make. During this time, the arrears will attract interest at the same rate as the mortgage until repaid.

If you currently have a capital repayment or part capital repayment mortgage, we may offer you a temporary switch to interest only. During this period, this option will reduce the amount you pay each month, because your payment will only cover the monthly interest charged.

Things to think about when considering a switch to temporary interest only payments:

• Due to you only paying the interest for a set period, the capital balance will not be reducing as you will not be making any payments towards repaying the capital during this time.
• When your temporary interest only period ends, your mortgage will change back to its original terms. This will mean your regular monthly payment will revert back to cover repaying both the capital and the interest on your mortgage over the remaining term. You'll need to make sure you can afford the increased payments, as under this option your account will not be able to remain on an interest only basis permanently.
• Interest is charged on any outstanding payment arrears at the same rate as your mortgage.

Depending upon your circumstances, we may agree to reduce the interest rate on your account for a short period of time.

Known as Capitalisation, this forbearance option results in the arrears being added to the capital mortgage balance so they are no longer classed as arrears. The missed payments are then repaid over the remaining mortgage term.

Things to think about when considering capitalising your arrears

• It's important you can demonstrate you can afford the increased payments before we will agree to capitalise your arrears. This is due to the monthly payments increasing to repay the capitalised arrears which will be more than your current regular monthly payment.
• Your account will show as being up to date on your credit file, although the history of any missed payments will remain.   
• Capitalisation of the arrears will mean that the capital balance on the mortgage account will increase.

Firstly, it’s important to establish whether you can afford to pay your mortgage and other priority debts.

To work this out, you should complete an Income & Expenditure form, which will help you work out your monthly budget. Download one here.  

Completing the Income & Expenditure form can take some time, but it's the best way to get an accurate view of the money you've coming in and going out. It'll also help provide a clearer idea of what mortgage support option we might be able to offer to you.

Before you start, make sure you've all the information you need such as bank statements, bills, receipts and anything else that will help you get a clear picture of the household finances. Think about your spending and split all outgoing costs into essential and non-essential items. 

Also, you’ll need to convert anything you pay for daily or weekly into monthly payment amounts. Please try to be as accurate as possible.

As you update the relevant sections of your Income & Expenditure form, the form will calculate how much money you've left at the end of each month - your monthly disposable income.

Before finalising your monthly budget, you may also want to:

• Check if you can make any changes to your spending to save you money as even small changes can add up every month.
• Check whether you’re eligible for any benefits and claim what you’re entitled to. 

If you need any help on completing the Income & Expenditure Form, please  call our Asset management Team and we will help you through the form.

Priority debts are those with the most serious consequences if you don't pay them. They aren’t always the largest debts or those with the highest interest rate either. Priority debts include:

• Mortgage payments and any loans secured against your home
• Council tax
• Child support and maintenance payments
• Utility bills such as gas, electricity and water
• Court payments
• HMRC payments

In addition to your mortgage, please ensure that you have taken into consideration any payments to other essential (priority) payments within your monthly budget so you don't fall behind on these important payments.