Supporting you and your mortgage customers with payment holidays
Following revised guidance from the FCA, we want to make sure that you and your customers remain fully informed around payment holidays, now also referred to as ‘payment deferrals’.
Although no monthly payments will be due during the customer’s payment holiday, interest will continue to accrue and will be added to their loan balance. This will result in an increase to their monthly payments when they restart at the end of the payment holiday and in the total cost of their borrowing.
If they’re able to afford any payments during their payment holiday, even if it’s less than their current monthly payment, we encourage them to do so as this will reduce the impact on their future monthly payments and total cost of borrowing at the end of the payment holiday.
Although taking a payment holiday won’t negatively impact their credit file, please make them aware that lenders may take into account other information when making future lending decisions.
Customers who have not yet had a payment holiday
Customers that have not yet had a payment holiday now have until 31 October 2020 to request one.
If a customer wishes to take a payment holiday, please direct them to the Mortgage payment holiday section on our public website, which provides all the information they need on how to apply.
Customers coming to the end of their payment holiday
We’ll write to customers before their payment holiday ends and explain what their new payment will be.
If the customer is happy to make the new payment, they won’t need to do anything other than to ensure their payment method remains in place for when their next payment is due.
We also recognise that some customers may not have been impacted to the extent they originally expected and may want to reduce the amount of additional interest they will be charged by repaying the amount deferred in full, making overpayments or extending their term.
Customers unable to resume full payments
If a customer is unable to restart their payments at the end of their payment holiday, there are other options available, which may include extending their payment holiday by another three months. However, the options available may depend on their personal circumstances and the date their payment holiday ends.
Further information
Please advise your customer to view our Mortgage payments holidays – next steps section on our public website for further information about the available options to them, once their payment holiday comes to an end.
If a customer wishes to discuss any of these options, please ask them to call
0800 169 6333 (Monday to Saturday, 08:00 – 20:00, Sunday 09:00 – 18:00) and choose ‘Option 0’.
Please note, we continue to receive extremely high levels of call volumes and are doing our best to answer them as quickly as possible.
Thank you for your continued support.
HSBC UK
