Information for customers affected by the Coronavirus (COVID-19)

How does a payment holiday work?
During the payment holiday, interest will continue to accrue and be charged to your account, which means your outstanding balance will increase.

Where you have a capital repayment mortgage, in most cases we expect that the interest accrued during the payment holiday and the deferred capital repayments, will be paid by spreading them over your remaining term. Where you have an interest-only mortgage, in most cases we would expect that the interest accrued during the payment holiday will be added to the balance you owe at the end of the term. With a part and part mortgage, we would expect these treatments to be applied to the relevant parts of your mortgage.

In all these scenarios, you will be paying interest on an increased balance and as a result, your future monthly payments will increase. The total amount of interest you pay over the term of the mortgage will also increase.

Should you wish to pay another way, or if you think you will have difficulties making the increased monthly payments, we will provide you with the opportunity to discuss this with us before your payment holiday ends.

Whilst we are following industry and regulatory guidance to make sure a payment holiday will not have a negative impact on your credit file, lenders may take into account other information when making lending decisions, including information provided by you or bank account information. See further information below about what will happen to your credit file during a payment holiday.

Please note: requesting a payment holiday does not change your mortgage term.

The Money Advice Service website includes a link to a mortgage holiday payment calculator which gives consumers an indication of the impact of a payment holiday on their monthly payments. The impact will be proportionately less if you are able to afford partial payments during the payment holiday.

Please note: This calculator is not affiliated with Zephyr Homeloans and you will need to input the following details in order to use the calculator. You can find these details on your annual mortgage statement. If you are unable to find the mortgage details required, please contact us and we can provide them to you.

• mortgage balance
• current interest rate
• remaining term in years and months
• repayment type (i.e. capital repayment or interest only)

If you have multiple parts to your account, (e.g. a part and part mortgage), then you will need to input details of each part into the calculator separately and total the impact on each part.

The calculator assumes you will be seeking to defer the full amount of your monthly payments during the payment holiday. If you can afford partial payments during the payment holiday the impact will be proportionately less than the estimate the calculator provides.

If you have any problems using the calculator, please call us so that we can provide you with an indication of the impact of the payment holiday on your monthly payments. We will also provide an indication when you call us to apply for a payment holiday.

The calculator should be used for secured mortgages only.

Payments due and suspending or changing payments

If a payment holiday is arranged, and you usually pay by Direct Debit you do not need to do anything, once the payment holiday is processed, the payment will not be collected. Please do not cancel your Direct Debit, without contacting us to discuss this first, as we won’t be able to take your new monthly payment when the payment holiday ends, which might mean you miss payments when they restart.

If a payment holiday is arranged and you pay by standing order, or if you have a recurring payment set up through online banking, then you will need to contact your bank either to cancel it – to avoid payments being made during the payment holiday – or to reduce the amount of your payment – if you want to make payments where you can afford to do so.

If you have a payment due in the next seven working days then it is unlikely that the payment holiday will be set up before your payment due date, so you should continue to make your next monthly payment. You should only cancel or reduce your standing order or recurring payment at your bank once this payment has been sent. Remember, you will need to reinstate the standing order or recurring payment at the end of the payment holiday, ensuring that it is set for your revised monthly payment amount.

If you apply for a payment holiday online and your next monthly payment is due within seven working days, please call us as soon as possible if you are concerned about your ability to pay.

During a payment holiday, if there is an interest rate change, or if a transaction occurs that results in a recalculation of your monthly payment, we will still send out a letter advising you of the change to your monthly payment. However, if you have a payment holiday arranged, then the payment will not be collected or be payable and you will be advised of your further revised monthly payment towards the end of your payment holiday.

What if I’m already in arrears?
You can request a payment holiday, but you may wish to discuss your circumstances with us before you apply. If a payment holiday is arranged, we will continue to send monthly arrears letters, as your previously missed payments are still outstanding.

What if I can afford to make some form of payment?
Paying what you can afford either monthly, or whenever you can afford to do so means that the impact of the payment holiday on your balance will be reduced. So any increase in your future monthly payments will be smaller and the amount of additional interest you pay as a result of the payment holiday will be reduced.

If your account is currently in arrears, any payments received during the payment holiday will be used to reduce the arrears first.

Where can I find help with budgeting and finance?
If you are worried about money or debts you need to set a realistic budget. Make a list of your debts and work out which ones are highest priority and which are less important. For most people, it makes sense to pay essential expenses and priority debts before any discretionary expenses or non-priority debts.

The Money Advice Service has developed a Money Navigator tool, designed to help people whose finances have been impacted by coronavirus (COVID-19), such as those facing redundancy, self-employed or freelance workers whose income has been affected and people who have experienced a temporary drop in their income.

The tool will also help users find support from other organisations such as National Debtline, Citizens Advice, PayPlan, StepChange and others.

You can also find out what services are available across the UK, including what face to face support is available in your local area using the Debt Advice Locator tool, designed by the Money Advice Service.

The StepChange debt charity has also published a reduced income guide to help people with a reduced income to deal with their finances, such as making arrangements with creditors. We recommend you read this and take any action you need to sooner rather than later.

See our ‘Help with Financial Difficulties‘ page for details of other independent not-for-profit organisations, including Citizens Advice and the Money Advice Service, for further guidance on money, debt, housing and employment.

If I take a payment holiday what will happen to my credit file?
Whilst we are working on the basis of industry and government guidance to ensure that the payment holiday will not adversely impact your credit file, we cannot guarantee how other lenders will interpret the payment holiday when assessing any future lending decisions. Lenders may take into account other information when making future lending decisions, including, for example, information provided by you as an applicant and bank account information.

If your account is currently up to date, then your credit file will continue to reflect this status.

If you are currently in arrears, then your credit file will continue to reflect the same arrears status during the payment holiday as immediately prior to it. We will continue to send monthly arrears letters, as your previously missed payments are still outstanding.

When will the payment holiday take effect?
We will do our best to ensure your payment holiday starts/continues in line with your request. However, due to the high volume of requests being received it may take us longer than usual to process your request. Once your request is processed, we will write to you to confirm its start date.

If your next monthly payment is due in the next seven working days, your payment holiday will start from the following month.

If you are unable to meet your full payment in the meantime, then this payment will fall into arrears. In order to minimise the amount of arrears outstanding we would advise you to make a payment for as much as you can afford. Please contact us by telephone as soon as possible if you are concerned about your ability to pay.

If you previously paid by Direct Debit and the Direct Debit hasn’t been cancelled by you, we will automatically collect your payments again by Direct Debit. If you previously paid by standing order or another method, or cancelled your Direct Debit, you will need to make arrangements to restart your monthly payments ensuring that they are set for the revised monthly amount detailed in our letter to you.

What if I am still struggling to make payments?

If, at the end of your payment holiday you consider that you will continue to have difficulties in making your mortgage payments you can apply for a further payment holiday for 1-3 months. This is providing you have not already taken a payment holiday up to the maximum of 6 months and the request is made before 31 March 2021, or if you make your request after this time your request must extend your previous payment holiday and be continuous.

It’s important to remember that you will still owe these payments and the payments already deferred; both will still need to be paid at a later date. Again, you will be paying interest on an increased balance and as a result, there will be a further increase in your future monthly payments. The total amount of interest you pay over the term of the mortgage will also increase. For this reason, it is in your interests to make some form of affordable payments even if you request a further payment holiday.

If you have already taken a payment holiday for the maximum period of 6 months we have other options available to provide you with continued support. These may include:

• A temporary concessionary arrangement – allowing you to pay a reduced contribution towards your monthly payment, for an agreed period. The shortfall in your monthly payments will fall into arrears which could lead to additional fees being charged and notification of the level of arrears being reported to credit reference agencies. The arrears would also need to be repaid later, through a further payment arrangement.
• A temporary conversion to interest only (only applicable if you have a repayment account) – the monthly payment could be recalculated to just cover the interest that is due, for an agreed period. At the end of the temporary conversion your payments will be recalculated again. As the unpaid capital will be getting repaid over a shorter term, this will cause a further increase in your future monthly payments.
• Extending your mortgage term (only applicable if you have a repayment account and where mortgage terms and conditions allow) – the monthly payment will be recalculated and will reduce because your balance is being repaid over a longer period. However, this option will also increase the amount of interest you have to repay overall.

If you are in long term financial difficulties or have already taken a payment holiday up to the maximum of 6 months and are unable to resume mortgage payments, please provide income and expenditure information so that we can assess your circumstances and provide you with continued support. You can also contact us by telephone to provide your details or if you would like to discuss the options above.

You can provide us with your information online here. If you have not used this facility before then you will need to follow a simple process to create a secure login before you can provide us with your information. We will then contact you to discuss the options available to you.

Please note – if you have more than one mortgage with us, our online income and expenditure tool may not be suitable for you as it currently works on an individual account level and does not apply where you have a portfolio of properties.

Do I have option for paying back the deferred payments in a different way?
The letter we will send to you towards the end of your payment holiday will outline alternative options for paying the deferred payments (on a voluntary basis). These may include:

• Single lump sum overpayment – repaying all deferred payments in a single payment.
• Partial lump sum overpayment – repaying some deferred payments in a single payment with only the remaining deferred payments being paid over the remaining term of your account.
• Monthly agreement to pay – you can offer to pay more than your new monthly payment to reduce the deferred payments on a monthly basis. How long it takes to repay the deferred payments will depend on how much you offer to pay each month in addition to your monthly payment.
• Partial lump sum overpayment followed by a monthly agreement to pay – repaying some deferred payments in a single payment followed by an offer to pay more than your new monthly payment to reduce the remaining deferred payments on a monthly basis.
• Extending your mortgage term (only applicable if you have a repayment account and where mortgage terms and conditions allow) – the monthly payment will be recalculated, reverting to approximately what it was prior to the payment holiday. However, this option will also increase the amount of interest you have to repay overall.

Repaying pre-existing arrears

If your account was in arrears before your payment holiday, you will need to make arrangements to repay these. We will always provide a reasonable amount of time for you to repay the arrears.

If you are not in a position to clear the arrears in full, but are able to pay your full monthly payment as well as making monthly contributions towards them, then we can consider a payment arrangement with you that takes account of your circumstances. We will need to update of your income and expenditure information so that we can assess your circumstances to provide you with continued support. You can contact us by telephone to provide your details or if you would like to speak to us about your circumstances and options.

You can also provide us with your information online here. This facility is available 24 hours a day, 7 days a week. If you have not used this facility before then you will need to follow a simple process to create a secure login before you can provide us with your information. We will then contact you to discuss a payment arrangement with you.

Please note – if you have more than one mortgage with us, our online income and expenditure tool may not be suitable for you as it currently works on an individual account level and does not apply where you have a portfolio of properties

The StepChange debt charity has published a reduced income guide on their website that aims to help people deal with a reduced income due to the coronavirus.

Other ways to make your monthly payment
Perhaps you are having trouble making your monthly payment because of the latest movement restrictions or illness / isolation. To discuss any alternative payment options that may be available, please contact us.

Getting a third party to help you manage your account

In addition to any payment difficulties you may be experiencing please tell us, as soon as possible, if there is anything else that we need to be aware of, or consider, when administering your account.  This may include any specific issues you are facing that is causing your payment difficulties or that may be impacting your ability to communicate with us regarding your account.

If you are finding it too difficult to manage your account during this period, or would simply like additional support in dealing with your account from a third party (such as a friend or family member) you may wish to consider setting up a third party authority to allow us to deal with someone who is able to assist you in respect of your account.

Please note: If you wish the nominated third party to act for you and other borrowers named on the account they will be required to sign the form also. In addition, please ask your nominated third party to complete their details and provide a signature in the relevant sections of the form.

Where the nominated third party is an individual their signature confirms they have received a copy of our Privacy Notice which can be accessed here. Please ensure they receive a copy of this, or notify them where this can be accessed.

To enable a third party to obtain information and/or make payments on your behalf to your mortgage account with us, please complete and sign the Third Party Authority form and return it to:

Zephyr Homeloans, Gateway House, Gargrave Road, Skipton, BD23 2HL

Domestic Abuse
Since the lockdown began, there has been a significant rise in incidents of domestic abuse.  The Government has issued guidance on their website to support victims of domestic abuse and launched a social media campaign to publicise the availability of support – #YOUARENOTALONE.

It is estimated that 95% of domestic abuse victims also experience economic abuse. If someone else is controlling your finances or stopping you from controlling your finances, the charity Surviving Economic Abuse has also provided additional guidance and support on their website.

Be aware of scams
Unfortunately, fraudsters are using the coronavirus pandemic as an opportunity to defraud individuals. Take Five is a national campaign that offers straight-forward and impartial advice to help everyone protect themselves from preventable financial fraud. They have published a scam alert on their website to help individuals spot and avoid scams in relation to coronavirus.

More information about the Covid-19 virus
Details of the Government’s response to coronavirus can be found on the UK government website.