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Mortgage payment deferral

Important information about the mortgage payment deferral scheme and how to request a payment deferral on your mortgage.

Important update: 25 November

On 17 November the Financial Conduct Authority (FCA) published further guidance for lenders on extending the mortgage payment deferral scheme, which came into force from 20 November 2020.

Under this extended scheme the period of full or partial payment deferral is unchanged at up to six monthly payments. This means that if you have:

  • already had four months payment deferral in the first scheme you may request a further two months payment deferral in the extended scheme.
  • not taken any payment deferral previously you can potentially have up to six months of payment deferral in the extended scheme, split into two periods of up to three months each (see key dates below).
  • already taken six months payment deferral then no further payment deferral is available in the extended scheme.

Some key dates to note

  • After 31 January 2021 the total number of monthly payments which can be deferred by borrowers requesting a payment deferral for the first time will gradually reduce. This is because all payment deferrals must end by 31 July 2021.
  • After 31 March 2021 all payment deferrals must be consecutive – this means that after this date you cannot resume payments and then request a further payment deferral.
  • 31 July 2021 – all payment deferrals must end by this date.

The wording below and our mortgage payment deferral request form has been updated in line with the new FCA guidance.

Payment Deferral (also called Payment Holiday)

We know that the effect of the coronavirus means you might be worried about how your finances will be affected, and perhaps, how you'll be able to afford paying your mortgage.

As a result, we're offering our mortgage members the ability to take a break (or holiday) from paying part or all of their mortgage for up to six months.

Mortgage payment deferral request form

What taking a payment deferral means

If you take a mortgage payment deferral, you won't make any mortgage payments (or will make partial payments) for up to three months. And you may request a further period of up to three months. But it's not free money. We'll add anything you don't pay now onto the balance of your mortgage. This means that your mortgage balance and your future monthly payments will increase, and we'll recalculate this over the rest of your term. You don't have to pay a fee for taking a mortgage payment deferral, and it won't have a negative effect on your credit score. However, if you apply for credit or a mortgage elsewhere there are other ways lenders can tell whether you have taken a mortgage payment deferral, which could affect future lending decisions. Lenders may take into account other information when making lending decisions, including information provided by you or bank account information, for example.

At the end of each period of the payment deferral we'll contact you and let you know your options for making up the payments you deferred during the break.

It's important you understand that as a result of taking a payment deferral, your mortgage payments will increase, possibly for the remainder of your mortgage term. You'll also pay more interest in total than you otherwise would have done.

As an example, for an owner occupier capital repayment mortgage of £100,000 over 25 years at Family Building Society’s variable Managed Mortgage Rate of 4.39% interest, your monthly payment after a three month payment holiday will increase by £9.14.

Are you eligible for a payment deferral?

We will approve your mortgage payment deferral upon request if you have not already received a payment holiday of six months. If you're already behind on your mortgage payments with us, known as being 'in arrears', please call us first so we can discuss your specific circumstances. You can contact us on 03330 140146.

There are other alternatives to taking a payment deferral too, so if you're concerned about your current financial situation or feel that you can still contribute something towards your mortgage, but not the full amount, please get in touch with us as soon as possible to discuss what alternative options may be suitable for you.

What taking a payment deferral means

If you take a mortgage payment deferral, you won't make any mortgage payments (or will make partial payments) for up to three months. And you may request a further period of up to three months. But it's not free money. We'll add anything you don't pay now onto the balance of your mortgage. This means that your mortgage balance and your future monthly payments will increase, and we'll recalculate this over the rest of your term. You don't have to pay a fee for taking a mortgage payment deferral, and it won't have a negative effect on your credit score. However, if you apply for credit or a mortgage elsewhere there are other ways lenders can tell whether you have taken a mortgage payment deferral, which could affect future lending decisions. Lenders may take into account other information when making lending decisions, including information provided by you or bank account information, for example.

At the end of each period of the payment deferral we'll contact you and let you know your options for making up the payments you deferred during the break.

It's important you understand that as a result of taking a payment deferral, your mortgage payments will increase, possibly for the remainder of your mortgage term. You'll also pay more interest in total than you otherwise would have done.

As an example, for an owner occupier capital repayment mortgage of £100,000 over 25 years at Family Building Society’s variable Managed Mortgage Rate of 4.39% interest, your monthly payment after a three month payment holiday will increase by £9.14.

Are you eligible for a payment deferral?

We will approve your mortgage payment deferral upon request if you have not already received a payment holiday of six months. If you're already behind on your mortgage payments with us, known as being 'in arrears', please call us first so we can discuss your specific circumstances. You can contact us on 03330 140146.

There are other alternatives to taking a payment deferral too, so if you're concerned about your current financial situation or feel that you can still contribute something towards your mortgage, but not the full amount, please get in touch with us as soon as possible to discuss what alternative options may be suitable for you.

What happens after you request a payment deferral?

Once you complete the mortgage payment deferral request form, we will contact you and give you personalised examples based on your mortgage of how the payment deferral will affect the cost to the remainder of your mortgage term. If you're happy with this and it is still affordable, we'll then apply the payment holiday to your mortgage.

Please do not cancel the direct debit for your monthly mortgage payment without contacting us first at mortgage.service@familybsoc.co.uk. Cancelling your direct debit will not create a payment deferral and missing a mortgage payment will have an adverse effect on your credit history and your ability to obtain credit in the future.


Support and advice

Money and Mental Health - Practical Financial Skills to Manage Money offers practical information and useful tips on budgeting and dealing with debt.

Mortgage payment deferral request

Complete our form if you would like to request a payment deferral on your mortgage.