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Mortgage payment difficulties due to Coronavirus
What is a Mortgage Payment Deferral?
With a payment deferral you'll make reduced or no monthly mortgage payments for a set amount of time, in this case up to three months initially.
However, it’s important to remember that you still owe that money and the interest on your mortgage still accrues during a payment deferral.
At the end of the payment deferral we'll recalculate your monthly payments over the remaining term of your mortgage. We'll write to you to let you know your new monthly payments and to outline the other options available to you to repay the interest charges incurred and make up the deferred payments. We'll have a range of options available to help you to do this.
How do ‘payment deferrals’ work?
The mortgage repayment, or part of it, is deferred for a period. The monthly payment changes to zero or the reduced amount, and interest accrues for the period. This may be particularly appropriate where there is a temporary shortfall of income.
However, this is not a solution where, because of a permanent reduction in income, a borrower is unable to afford anywhere near the full mortgage repayments and there is little prospect of an improvement in the situation in the foreseeable future.
Where repayments are deferred for a time, the borrower will need to make up these repayments in the future, which could be over the remaining term.
Am I eligible for a payment deferral?
To be eligible for a payment deferral you'll need to self-certify that your income has been impacted by Coronavirus.
If you're a Buy-to-Let landlord, it'll be available if your tenants have lost income because of the impact of Coronavirus in order for you to pass this relief onto them.
There are a number of options available and payment deferrals aren’t always the most suitable solution for everyone. By speaking to us, we can tailor the best option for you.
Will all customers receive an automatic three-month payment deferral?
A flexible approach will enable all types of lenders to offer the right support for customers. We'll want to speak to you to find out how we can tailor the best option for you.
We'll help customers the best way for the individual, but an automatic payment deferral may not always be the most suitable approach and may not be required by all customers.
Will a payment deferral affect my credit file?
If you’re up to date with payments and we grant you a payment deferral because your income has been impacted by Coronavirus, this will not be reported on your credit file. This covers both the initial payment deferral of up to three months, and any extensions granted for up to a further three months. However, lenders may use information obtained from other sources, such as bank account information or information provided by you as part of the application process, in their lending decisions.
If you've reached the end of your maximum six months’ Mortgage Payment Deferral and you need support for longer, or you need support after the deadline for applying for a mortgage payment deferral, we’ll work with you to come to an arrangement to get you back on track, but any missed payments after this will report on your credit file.
Can anyone apply for a Coronavirus mortgage payment deferral?
If you're in financial difficulty as a result of Coronavirus and are concerned about making your mortgage payments during this time you should contact us as soon as possible. You don’t need to provide any documentation; however you will need to self-certify that your income has been either directly or indirectly impacted by Coronavirus.
If you’re unsure whether a mortgage payment deferral is right for you, you may find it useful to read the Money Advice Service’s A guide to Coronavirus mortgage payment holidays.
What affect will a mortgage payment deferral have on my mortgage payments?
If you’d like an approximate indication of the impact a mortgage payment deferral will have on your monthly payments you may find the MoneySuperMarket 'Taking a Mortgage Payment Holiday' Calculator useful.
You’ll need to know your current mortgage payment, outstanding mortgage balance, repayment type and (for repayment mortgages) your remaining term.
If you have access to your accounts online or via The Cambridge Money App, you’ll be able to find your latest mortgage payment and outstanding balance there.
If you have your 2019 mortgage statement you’ll be able to see the repayment type and term that was remaining on your mortgage as at 31st December 2019. If you’ve made no changes to your term since then, you can use this to work out what your remaining term will be now.
If you don’t have access to any of this information, or if you have multiple parts to your mortgage, call the team on 0345 601 3344 and they’ll be able to help.
How do I apply for a mortgage payment deferral?
If you're concerned about making your mortgage payments during this time you should contact us as soon as possible. You don’t need to provide any documentation; you'll just need to self-certify that your income has been either directly or indirectly impacted by Coronavirus.
You can apply for an initial payment deferral up until 31st March 2021, but if you want to benefit from the maximum permitted six months’ payment deferral you’ll need to apply in good time before your February 2021 payment as deferrals can only cover payments up to and including July 2021.
If you’ve already had a payment deferral of less than six months you can apply for an additional payment deferral up until 31st March 2021 (subject to the maximum overall six months). If your initial three month payment deferral expires after 31st March 2021 you’ll have the option to extend it up to and including July 2021 payment (again subject to the maximum overall six months) as long as the initial payment deferral and the extension run consecutively.
If you're a Buy-to-Let landlord, you'll need to self-certify that your tenant’s income has been impacted by Coronavirus. Landlords are expected to pass on this relief to their tenants to ensure that they're supported during this time.
You can submit a request for one of our experts to call you back regarding a mortgage payment deferral using the 'Need Help?' section below.
How long will it take for you to process my payment deferral?
We're doing our best to support our customers during these unprecedented times. However, the impact of Coronavirus is also having an effect on our own teams and applications will be dealt with as quickly as possible.
What happens if I'm already in arrears, and I need a mortgage payment deferral?
If you're concerned about the impact Coronavirus will have on your income, then you should contact us as soon as possible. We'll review any changes to your circumstances to ensure that your payments remain sustainable. We'll make every effort to support people already in financial difficulty, while ensuring a mortgage remains sustainable.
Mortgage providers have agreed to a moratorium (from 19th March 2020 to the 31st January 2021) on residential and buy-to-let possession action, meaning that no homes will be repossessed at this difficult time.
What happens at the end of a mortgage payment deferral?
At the end of the payment deferral we’ll recalculate your monthly payments over the remaining term of your mortgage. We’ll write to you to let you know your new monthly payments and to outline the other options available for you to repay the interest charges incurred and make up the deferred payments. We’ll have a range of options available to help you to do this:
- Make a one off payment penalty free, to represent the shortfall amount. This will immediately lower the balance outstanding and the amount of interest charged. Your payments will then be recalculated on the reduced balance
- Make an arrangement to repay the shortfall amount over a shorter period of time
- Extend the mortgage term by the duration of the payment deferral agreement period. This option will increase the amount you pay back over the lifetime of your mortgage
If you’d like to opt for one of these alternative options you can complete and return the form that will be enclosed when we write to you at the end of your payment agreement. If you need to discuss these options in more detail, the letter will also tell you how you can book a telephone appointment with one of our experts.
What if I need support longer term or help to recover to my previous position after the payment deferral expires?
When we write to you at the end of your payment deferral agreement we’ll invite you to book an appointment with one of our experts if you’re still experiencing financial difficulty.
If you were already in arrears, or indicated to us at the time that you took your payment deferral agreement that you may need longer term support, we'll get in touch with you to assess your circumstances before the end of your payment deferral. This may include assessing income and expenditure, to come to an arrangement with you to enable recovery through the full repayment of the arrears.
If you're in financial difficulty; we'll come to an arrangement to recover you into a sustainable position on the mortgage. Any forbearance arrangements will aim to minimise the risk of possession but the normal rules will re-apply after 31st January 2021.
Will a mortgage payment deferral be applicable to customers with Help to Buy loans?
Homes England have stated that homeowners who are struggling to pay interest fees on their Help to Buy equity loans will be offered payment deferrals, this is applicable for Help to Buy customers who are paying interest on their Equity Loans
Help to Buy: Equity Loans are interest-free for the first five years. Therefore, this announcement will apply to those who took out the loan before 31 March 2015.
The Help to Buy Director Will German at Homes England said:
We will do all we can to support Help to Buy customers through this unprecedented period of economic uncertainty. Like other lenders, we will offer payment holidays for those who are struggling to pay interest fees on their equity loans.
We will also offer a range of flexible payment options to defer interest payment for a period. In all cases, we will seek to support households in difficulty.
We understand monthly mortgage payments tend to be the largest outgoing for the vast majority of households. Where households also have equity loan payments under the Help to Buy scheme, we are keen to reassure them that we will offer similar options to their main mortgage lender.
We will assess all cases of hardship on a case-by-case basis. The first step is for customers experiencing difficulty related to Coronavirus to contact their main mortgage lender to discuss revised payment arrangements.
What if I need additional help managing my money and debts due to Coronavirus?
If you’re worried about other debts you should contact your other creditors to discuss your repayments. It’s important to pay essential expenses and priority debts before any discretionary expenses or non-priority debts, and you may find it useful to work out a budget.
Free impartial information and confidential debt advice is available. You may find it useful to visit the FCA’s information page ‘Dealing with financial difficulties during the coronavirus pandemic’ or the Money Advice Service coronavirus support page.
General mortgage questions
What is an Approved Solicitors Panel?
Our Approved Solicitors Panel is made up of a group of solicitors we've worked with before and trust to act on your behalf. Take a look through the pdf to find a solicitor near to you.
If you choose to appoint a firm that is not on our panel, we will require our own partner Solicitor to act on our behalf. You will be responsible for our legal fees in addition to your own legal fees.
What charges might I incur with my Cambridge Mortgage
There may be fees associated with your mortgage from getting it to changing or ending it. We want to make sure you understand the fees that may apply to you, so, we've worked with the Council of Mortgage Lenders and Which? to show these clearly, take a look at the pdf to see all our fees.
My Solicitor isn't on your panel, can they join it?
Solicitors that are using Lender Exchange can join our panel. They'll need to log in at www.lenderexchange.co.uk and apply to join there.
Solicitors not on Lender Exchange can call them on 0344 244 3784 to discuss the application process.
Can I view my mortgage account online?
You can view all your accounts with The Cambridge via our website or money app – it’s simple and secure. To get started, simply call us or pop into your nearest branch to request your User ID and we’ll talk you through the rest.
Where do you offer mortgages?
Our mortgages are available on properties located in England and Wales.
Do you offer mortgages on holiday lets?
Yes, you can find our Holiday Let mortgages here.
What age restrictions are there on mortgages from The Cambridge?
The minimum age is 21. There is no maximum age limit.
Can I get an Interest Only mortgage with The Cambridge?
Interest Only repayment options are available across our mortgage range on loans of up to £500,000 with a maximum loan to value of 70%. Interest Only mortgages are subject to criteria and the suitability of proposed repayment methods – talk to our team to find out more.