Mortgage Payment Deferrals

Updated - 20/11/2020

Darlington Building Society will support customers experiencing issues with their finances as a result of COVID-19, including giving the option of a mortgage payment deferral.
 

We can offer a mortgage payment deferral if you are experiencing payment difficulties and if it is the best option for you.

With a mortgage payment deferral you will not have to make your normal monthly mortgage payments. However, interest on a mortgage is charged daily and the total cost of the mortgage may be significantly more expensive as a result of a payment deferral.

If you are happy to go through a full assessment of your circumstances, we may be able to offer you tailored support to help.

In November 2020 the FCA announced that lenders can extend the availability of payment deferrals to:

  • those who have not yet had a payment deferral. In this situation, borrowers will be eligible for payment deferrals of up to 6 months in total (applying for a maximum of 3 months at a time);

  • those who currently have a payment deferral. In this situation, borrowers will be eligible for additional payment deferrals of up to 6 months in total (applying for a maximum of 3 months at a time);

  • those who have resumed repayments after a payment deferral. In this case, borrowers will be eligible for additional payment deferrals of up to 6 months in total (applying for a maximum of 3 months at a time).

If you have missed mortgage payments/or are already in arrears you may be eligible for a payment deferral.  Please contact us if you are in payment difficulties – as tailored support specific to your circumstances may be the best option for you.

It’s important that borrowers who can afford to make repayments continue to do so.

How to apply for a mortgage payment deferral

1. Read the FAQs below, as your question may be answered, then;

2. Complete our mortgage deferral application form which will ensure your request is directed to the mortgage payment deferral team or;

Contact us by phone on 01325 741060 between:

  • 9am-5pm Monday, Wednesday and Friday

  • 9am-6pm Tuesday and Thursday

  • 9am-12pm Saturday

3. Wait for a member of our payment deferral team to get in touch. We will prioritise our responses based on when mortgage repayments are due. It would be helpful if you could have to hand a recent bank statement and details of your income and expenditure when we contact you.

If the above times are unsuitable, you can email paymentdeferrals@darlington.co.uk with a preferred time for us to contact you between Monday-Friday 8am to 8pm.

Please do this at the earliest possible opportunity and we will respond to you as soon as we can to discuss the options available to you.

FAQ's
 

I am still awaiting a call-back from yourselves?

We are committed to responding to your requests as quickly as possible, but please be aware that due to staff homeworking, our service levels may be slower than usual and we advise all members to contact us in good time before your next monthly payment is due. Please note, we are prioritising our responses based on when mortgage repayments are due.

What is a mortgage payment deferral?

With a mortgage payment deferral you will not have to make any monthly mortgage payments for a set amount of time, in this case, up to a maximum of six months.

However, it’s important to remember that you still owe that money and the interest on your mortgage still accrues during a mortgage payment deferral.

This means that, at the end of the mortgage payment deferral, you will have to make up the missed payments and interest accrued. There will be various options for doing this, for example, by increasing your monthly payments, or, by extending the term by the number of months of your payment deferral.

How do I know if I am eligible for a mortgage payment deferral?

To be eligible for a mortgage payment deferral you will need to:

  • have had your income recently affected, for example, since the impact of Covid-19 and;

  • have not already taken a mortgage payment deferral for the full 6 months.

The table below outlines payment deferral eligibility based on the new guidance announced in November 2020:

Previous payment deferral

Maximum payment deferral you can apply for

None

Up to 3 months at one time, and a maximum of 6 months in total.

1 – 3 months

Up to 3 months at one time and a maximum of 6 months in total.

4 months

Up to 2 months (you can apply for 1 month at a time)

5 months

1 month

6 months+

You are not eligible to apply for any further mortgage payment deferrals.

If you are concerned about your payments, please contact us as soon as possible. We will review any changes to your circumstances to ensure that your payments remain sustainable.

If you are happy to go through a full assessment of your circumstances, we may be able to offer you tailored support

 

If you are a Buy-to-Let landlord, mortgage payment deferrals may be available if your tenants have lost income and are unable to therefore pay the rent/part pay because of the impact of COVID-19. See Buy-to-Let landlord question below.

There are a number of options available and mortgage payment deferrals aren’t always the most suitable solution for everyone. By speaking to us, we can tailor the best option for you.

How long do I have to apply for a mortgage payment deferral?

You can apply any time up to 31st March 2021. 

If you do not apply for a mortgage payment deferral in good time before your February payment is due you will only be able to receive a deferral until 31 July 2021, which may mean you have fewer than six months.

If you are experiencing, or reasonably expect to experience, payment difficulties and need a mortgage payment deferral, you should speak to us in good time before your next payment is due. We will prioritise responses based on when the mortgage repayment is due.

Can I have a payment deferral after my July 2021 payment?

No - payment deferrals cannot extend past your July 2021 payment.

How do I apply for a mortgage payment deferral?

Ensure you have read the FAQs on this page, then;

  • Complete our mortgage deferral application form which will ensure your request is directed to the mortgage payment deferral team or;
  • Contact us by phone on 01325 741060.

You don’t need to provide any documentation; you will just need to self-certify that your income has been either directly or indirectly impacted by COVID-19.  We will also ask you a few questions to understand your circumstances.

What if I have already had a mortgage payment deferral?

The revised guidance gives borrowers a maximum of 6 months for mortgage payment deferrals.

Those who currently have a payment deferral in place will be eligible to apply for additional payment deferrals of up to 3 months at a time (as long as total deferral time doesn’t exceed 6 months).

Those who have had a payment deferral, and have resumed repayments since will be eligible to apply for additional payment deferrals of up to 3 months at a time (as long as total deferral time doesn’t exceed 6 months).

What if I have already had a mortgage payment deferral and an extension for a total of 6 months?

If you have already had a payment deferral for 6 months, then you are no longer permitted to apply for a further mortgage payment deferral. If you are concerned about the impact Covid-19 will have on your income, then you should contact us as soon as possible. We will review any changes to your circumstances to ensure that your payments remain sustainable.

You can contact us:

  • by telephone on 01325 741060 or;

  • sending an email to financialsupport@darlington.co.uk or;

  • writing to us to 'Financial Support Team, Darlington Building Society, Sentinel House, Morton Road, Darlington, DL1 4PT'.

I am a Buy-to-Let Landlord, can I apply for a mortgage payment deferral?

If you are a Buy-to-Let landlord, you will need to self-certify that your tenant’s income has been impacted by COVID-19. Landlords must pass on this relief to their tenants to ensure that they are supported during this time.

I am not sure if I need a mortgage payment deferral?

You should not apply for a mortgage payment deferral if you are not experiencing, or do not reasonably expect to experience, payment difficulties.

If you can afford your monthly payments you should continue to pay.  If you are worried about being able to make future payments, it is important that you contact us and discuss your options.

You will still owe the money where a mortgage payment deferral has been granted and interest will still accrue. If you are able to make part, or all, of your normal mortgage payment to reduce the money you owe or your interest charges then you should consider doing so.

There are a number of options available and mortgage payment deferrals aren’t always the most suitable solution for everyone. By speaking to us we can tailor the best option for you. If you can afford to start repaying your mortgage again, it is in your best interest to do so.

Will I still be charged interest?

Yes, you will still be charged interest during your mortgage payment deferral which will be added to the mortgage debt.

Can I cancel my direct debit payment instead?

It is only a mortgage payment deferral if it has been agreed with us.

You should not cancel your direct debit without speaking to us first. Cancelling your direct debit is not a mortgage payment deferral and will be counted as a missed payment. This could show up in your credit file and may impact your ability to obtain future credit.

How long will it take to process my application?

We are committed to responding to your requests as quickly as possible, but please be aware that due to staff homeworking, our service levels may be slower than usual and we advise all Members to contact us in good time before your next monthly payment is due.

We are doing our best to support you during these unprecedented times. However, the spread of COVID-19 is also having an impact on our own staff and applications will be dealt with as quickly as possible.

If I take a mortgage payment deferral what will happen to my credit score?

We will make every effort to ensure that if you take a mortgage payment deferral it does not negatively impact on your credit score.

Taking another full or partial mortgage payment deferral should not have a negative impact on your credit file.

While a worsening status will not be reported on your credit file in respect of any payment deferral, lenders may take into account other information when making future lending decisions, including, for example, information provided by applicants or bank account information.

What happens if I am already in arrears, or behind with my mortgage payments?

If you are currently in arrears and entering into a mortgage payment deferral we will contact you when the payment deferral ends to agree a specific arrangement to pay what is affordable, and minimise the build-up of arrears to help recover you into a sustainable position on your mortgage. Again, any forbearance arrangements will aim to minimise the risk of possession.

If you are concerned about the impact Covid-19 will have on your income, then you should contact us as soon as possible. We will review any changes to your circumstances to ensure that your payments remain sustainable. We will make every effort to support people already in financial difficulty, while ensuring a mortgage remains sustainable. You can contact us by phone on 01325 741060, in writing at our head office address or by sending an email to financialsupport@darlington.co.uk.

We will not take any action which could lead to possession before 31st January 2021, meaning that no homes will be repossessed at this difficult time. This is applicable to residential or Buy-to-Let mortgages. The Society has made a commitment to not take possession of any properties before June 2021, providing borrowers cooperate with us.

What if I don’t own my property but rent instead?

You should contact your landlord or managing agent if you have problems paying your rent. If you are a landlord and your tenants are unable to pay their rent, you should contact us as soon as possible to discuss the options that may be open to you.

What if I need support longer term, or help to recover to my previous position after the mortgage payment deferral expires?

If you are not currently in arrears but believe you will need additional help at the end of the mortgage payment deferral, please tell us when contacting us about a mortgage payment deferral.

Please ensure that you don’t ask for automatic capitalisation if you do not feel this arrangement to pay is suitable for you. We will then contact you to assess your circumstances and talk through your options. If you are in financial difficulty; we will 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.

Will I be able to apply for a mortgage payment deferral if I am a mortgage prisoner?

Yes, we will work with you to support you during these difficult times.

Am I able to change my mortgage deal whilst on a mortgage payment deferral?

Yes, however if you have any fees or charges within the Terms & Conditions of your mortgage product these would still apply, for example, an Early Repayment Charge.

What if my home is being repossessed?

The Society will not take any action which could lead to repossession under any circumstances until 31st January 2021. If you are worried about payments or repossession you should contact the Financial Support team before this day who have a range of options to support you.

The Society will not take possession of any member’s home before June 2021 if they are in arrears due to Covid-19, as long as you work with us to get your mortgage back on track.

You may choose for your home to be repossessed if you believe it’s in your best interests – for example, because you’ve already made plans for alternate accommodation. If this is the case, please contact us to let us know.

Will I still be charged interest during repossession?

Yes, you will continue to be charged interest on the amount you owe, plus any fees and charges you owe according to our tariff of charges.

What happens if the repossession is stopped?

If you do not want repossession to be stopped, contact us immediately.

The amount you owe will increase because interest will continue to be charged. This means that you are likely to get less back if and when your property is repossessed and then sold.

If property prices go down between now and the time your property is sold, then you might get even less back, or nothing if your property is sold for less than you owe. We will be able to give you more information on how this affects you.