Information for Kent Reliance Mortgage Customers

Can I take a payment holiday?

Kent Reliance is offering support to customers that are experiencing issues with their finances as a result of COVID-19, with one option being payment holidays.

Here’s what you need to know before applying:

If you're a buy to let customer, you're able to request a mortgage payment holiday but only if your tenants are unable to pay their rent due to COVID-19.

If you've not already taken a mortgage payment holiday of up to three months, and want to apply for one now, please complete our online mortgage payment holiday form. We'll then contact you within 5-7 working days to confirm whether you've been accepted. If you've already submitted an email, you don't need to submit a form as well. We'll process your request for a mortgage payment holiday in the same way.

If you have already taken a payment holiday, you will need to call our Collections Team, on 01634 835044 to discuss the options available.

If you take a mortgage payment holiday, this means that you won't make mortgage payments for up to three months; we'll add these payments onto your mortgage balance unless you contact us before your payments recommence to discuss alternative options for repaying the unpaid mortgage payments.

As a result, your mortgage balance will increase and your monthly payment will be recalculated over your remaining mortgage term. Your monthly payment and the amount of interest you pay will increase for the remaining term of your mortgage.

We'll let you know your new monthly amount at the end of your payment holiday.

Unfortunately we're unable to make any changes in time for payments due in the next 7 days. If your payment is due in the next 7 days and you're unable to make your normal monthly payment, please call our Collections Team on 01634 835044. You can also email recoveries@krbs.com to discuss your situation.

In line with government guidance, your credit rating won't be affected for the first six months by this arrangement whilst the payment holiday is in place. This only applies if you start the payment holiday before the 31st January.

Please note that if you’ve already emailed us, we’ll respond as soon as we can. We'll continue to follow government advice and will be regularly reviewing our policies to ensure we’re offering the best support for our customers, so please continue to visit this page for further updates.

What is a payment holiday?

A payment holiday enables mortgage customers to stop paying their monthly mortgage payments for a set period of time, in this case for up to three months. However, it’s important to remember that the money is still owed and the interest on the mortgage still accrues during a payment holiday.

Unless you tell us otherwise, the interest that has accrued during your mortgage payment holiday period will be capitalised. We’ll write to you in advance of your payment holiday ending to confirm the amount of your new increased payment and the date due. We’ll recalculate your monthly payments to ensure that the capitalised amount is repaid within the remaining term of your mortgage. To be clear, this will increase the payment that you make, and there will be additional interest charged over the remaining term of the mortgage as a result.

Extending your payment holiday will work in the same way. However, the longer the holiday, the more interest costs will increase, and the more you will pay back over the remaining term of the loan. This could be a significant amount, so we recommend that you take independent financial advice if you're unsure that this is the right option for you.

What do capitalised and capitalisation mean?

When you take a mortgage payment holiday it’s important to understand that interest will continue to accrue while you’re not making your normal monthly payments. At the end of the payment holiday period the interest that has built up will be added to your outstanding mortgage balance. This process is called capitalisation.

By capitalising the accrued interest, your outstanding mortgage balance will increase. We’ll have to recalculate your monthly mortgage payment so that your mortgage will be repaid in full at the end of your mortgage term and as a result, you’ll pay more interest over the remaining term of your mortgage.

If you'd rather make alternative arrangements to repay the capitalised amount, please call us on 01634 835044 or email recoveries@krbs.com so we can discuss the best options with you.

You can also complete an online request to increase your monthly payments here.

How much will my mortgage balance increase if I capitalise the accrued interest?

If you have a standard capital and interest repayment mortgage, your mortgage balance will increase by the amount of interest charged during the payment holiday period.

With a capital and interest mortgage, part of your monthly payment amount is used to repay some of your outstanding mortgage (the capital) and some is used to pay the interest charged (the interest).

For example, you have a capital and interest mortgage with a monthly payment of £500. £300 of this will be used to repay capital and the remaining £200 is used to pay the interest charged. If you take a three month payment holiday you would underpay £1,500 (£500 x 3), however as £900 of this would have been used to repay capital, your mortgage balance would only increase by £600.

Click here for payment holiday examples that illustrate how taking a payment holiday can affect your monthly payments and the total amount payable over your remaining mortgage term. These examples are for illustrative purposes only and assume a three month payment holiday has been taken.

What’s the difference in costs between capitalising and making an arrangement to pay back the missed payments?

If you capitalise the missed payments, your monthly payments will increase until your mortgage term ends, and that will include the additional interest added over the remaining mortgage term. If you choose to make an arrangement over a shorter period of time (where you pay more each month), then your payments for that period will be higher, but additional interest will only accrue for that period, which will cost you less over the term of your mortgage.

If you make a lump sum payment to clear the amount, you will only incur additional interest until the lump sum payment is received. Please call us on 01634 835044 so we can discuss the best options with you.

You can also complete an online request to increase your monthly payments here.

What are my options to repay the Payment Holiday?

We will write to you prior to the payment holiday ending to outline the options for repaying the unpaid amounts over the remaining term of the mortgage. These options may include;

• Option 1 - Re-calculating your payments over the remaining term to ensure the interest that has accrued during the payment holiday is repaid, as interest, over the remaining term of your mortgage (for these purposes we call this ‘capitalisation’).

The interest you pay on the interest which has accrued during the payment holiday, will also be collected as part of your recalculated monthly payments. If you have a Capital Repayment mortgage the repayment of the outstanding balance you would have otherwise paid during the payment holiday will also be included in these payments.

• Option 2 - Making additional payments each month over an agreed period of time, to repay the interest which has accrued during the payment holiday in a shorter period. If you have a Capital Repayment mortgage you can also choose whether to make an additional payment to repay the outstanding balance that you would have otherwise paid during the payment holiday.

If you choose this option you should end up paying less interest than if you choose ‘capitalisation’ as the period over which you are paying interest on the interest which has accrued during the payment holiday is shorter.

You can setup the additional payments by completing this form: Increased Payments Form

Either of the above options will result in an increased monthly payment until such time as the full amount is repaid.

• Option 3 - Repaying the interest which has accrued during the payment holiday as a single lump sum payment. If you have a Capital Repayment mortgage you may also choose whether to make a lump sum payment to pay the amount of the outstanding balance that you would have otherwise paid during the payment holiday.

You will still pay more interest than if you had not taken a payment holiday but you will pay less interest than if you choose either of the other options, as you will not pay interest on the interest which accrued during the payment holiday after it is repaid as part of the single lump sum.

If you wish to make a lump sum payment either over the phone or your banking app please call to discuss on 01634 835044.

• Option 4 - Extending your mortgage term. In some circumstances we may be able to consider an extension to your mortgage term which will result in you paying more interest over the term of your mortgage, but only where your new instalment is not affordable to you.

To discuss an extension to your mortgage term, please call us on 01634 835044.

IMPORTNANT: If we don’t hear from you before payments recommence, we will assume that you will repay the unpaid amounts over the remaining term of your mortgage, and will therefore ‘capitalise’ the unpaid amounts on to your account, see above for more information on the implications of this.

What if I can’t repay the Capital on my Interest Only Mortgage because of COVID-19?

We may be able to offer you support in these circumstances, so you should call us on 01634 835044 or email recoveries@krbs.com to discuss what options there are available.

What options do I have if I am already in arrears?

If you’re already in arrears or have alternative forbearance options in place, call our Collections Team on 01634 835044 or email recoveries@krbs.com to discuss the options available to you.

How long will it take to process an application for a mortgage holiday?

Our teams are doing their very best to support customers during these unprecedented times and we’re dealing with applications as quickly as possible. We’re aware that you may be experiencing delays, but please bear with us and we’ll get to you as soon as we can.

Please don’t be concerned if you receive an automated arrears letter, as we’ll deal with any arrears at the end of the payment holiday and ensure you’re not negatively impacted as a result.

Does the three months mortgage payment holiday have to be taken consecutively?

We'd expect the monthly payments covered by the payment holiday to be taken together, but we'll review individual cases where circumstances require a different approach to be taken.

What should I do if I can't make my next direct debit payment?

If you don't have the funds to meet your next direct debit and the payment is imminent, then you should cancel the direct debit to avoid unnecessary bank charges.

In line with government guidance, your credit rating won't be affected for the first six months by this arrangement whilst the payment holiday is in place. This only applies if you start the payment holiday before the 31st January.

However, if you haven't contacted us already, you should apply for a mortgage payment holiday here so that we can contact you to discuss your payment options.

What should I do if I've taken a payment holiday and continue to experience financial difficulties?

If you’re concerned about your ability to make future mortgage payments, we may be able to consider further forbearance which may include an extension to your payment holiday.

As the guidance in place from the Government is changing daily, requesting an extension to a current payment holiday too soon may not be the right thing for you to do. If you believe you’re going to experience on-going financial difficulties, please don’t contact us until the last month of your current payment holiday. This will help us to prioritise dealing with customers who have imminent need of further assistance and ensure that you have a full understanding of your circumstances as your current payment holiday comes to an end.

To enable us to support you, we’ll need a full understanding of your current household income and outgoings, we’re working alongside Paylink Solutions to enable our customers across the Group to complete an online income and expenditure form.

Please click here to access the system and the form.

Please note that you’ll be directed to an external website where you’ll see reference to all brands within our Group.

Once we have confirmation that you’ve completed the process, we’ll review the information provided.

We’ll write to you within 7 days to confirm a further payment deferral period has been agreed, or if further information is needed, a member of our team will call you to discuss your current circumstances to get a better understanding of how we can provide help and guidance. We’ll then agree with you the best practical way forward by putting affordable arrangements in place.

If you’re unable to use the link above please see I’m unable to access the system to complete the online income and expenditure form FAQ for alternative options.

Can I cancel a mortgage payment holiday after it's been arranged?

If you’ve arranged a payment holiday but no longer need it that’s no problem. Please send us an email at recoveries@krbs.com to confirm that you no longer require the payment holiday. We will then confirm that we have received your request and explain how much your next monthly payment will be and when it is due.

Can I extend my mortgage payment holiday?

Extending your mortgage term will result in you paying more interest over the term of your mortgage, we therefore need to fully understand your circumstances so we can determine why you’re making the request and whether we can agree to a term extension.

To enable us to support you, we’ll need a full understanding of your current household income and outgoings, we’re working alongside Paylink Solutions to enable our customers across the Group to complete an online income and expenditure form.

Please click here to access the system and the form.

Please note that you’ll be directed to an external website where you’ll see reference to all brands within our Group.

Once we have confirmation that you’ve completed the process, we’ll review the information provided.

A member of our team will call you within 7 working days to discuss your request further.

If we’re unable to agree to your mortgage term extension request, we’ll explain the reason why and explain what other options are available to you.

Please note that we’re unable to offer financial advice and it may be necessary for you to seek Independent financial advice. The website Unbiased.co.uk can help you find a financial adviser in your local area.

If you’re unable to use the link above please see I’m unable to access the system to complete the online income and expenditure form FAQ for alternative options.

What if I can't afford the new payment after the holiday period has ended?

In line with the guidance from the regulator and the government guidance, we still may be able to offer you further help. You must contact us as soon as we write to confirm the end of the payment holiday, to discuss the options open to you.

Currently we may be able to consider the following options:
- Allowing you to pay Interest Only payments for a short period of time
- Extending the payment holiday for up to a further 3 months
- Reducing your payments for up to a further 3 months

To enable us to support you, we’ll need a full understanding of your current household income and outgoings, we’re working alongside Paylink Solutions to enable our customers across the Group to complete an online income and expenditure form.

Please click here to access the system and the form.

Please note that you’ll be directed to an external website where you’ll see reference to all brands within our Group.

Once we have confirmation that you’ve completed the process, we’ll review the information provided.

A member of our team will call you within 7 working days to discuss your request further. 

If you’re unable to use the link above please see I’m unable to access the system to complete the online income and expenditure form FAQ for alternative options.

Before you apply for further assistance we strongly recommend that you look at the following information and get independent financial advice to understand what the implications are and if there’s a better alternative for your circumstances.
- Money Advice Service coronavirus support page
- ‘Dealing with financial difficulties during the coronavirus pandemic’

Please also read the information above regarding what a payment holiday is and the impact on your account and what it may mean for you in the future.

There won’t be any fees added to your account while you have an arrangement agreed.

I’m unable to access the system to complete the online income and expenditure form?

Here’s a manual version of the income and expenditure form.

Once completed, you can email the form to us at recoveries@krbs.com. Please include ‘Extension to mortgage payment holiday period’ or ‘Extension to mortgage term’ in the subject line of your email. Please be aware that this is an unencrypted mailbox and any personal information sent to it will not be secure.

Alternatively, you can return the completed form to us by post at the address below. We're aware that there are delays to the postal service across the country and whilst we're not currently experiencing these delays, we'll be sure to keep you updated should this change.

Kent Reliance
Reliance House
Sun Pier
Chatham
Kent
ME4 4ET

A member of our team will call you within 7 working days to discuss your request further.

What will happen to my credit score if I arrange a payment holiday?

In line with Government guidance, if you have a payment holiday or a further three month extension to your payment holiday, your credit rating won’t be affected by this arrangement whilst the payment holiday is in place.

This only applies if you start the payment holiday before the 31st January. If we agree to reduce your payments, the arrears will not be reported on your credit reference file either. 

It's possible that either of these options could impact your future borrowing, as we don't know how lenders will use this information in the future. 

Our website is being updated as any new guidance is made available.

I’m concerned about fraudsters, what can you do to reassure me?

Unfortunately, criminals will use every opportunity to trick you into revealing personal or financial information and regrettably, the current COVID-19 situation is no different. Remember: we’ll never ask you to give out your PIN, password or any other security details, or to ask you to transfer money to a ‘safe’ account.

Always take a moment to think before passing on information that you should keep safe.

Organisations that offer help and advice

Here are some organisations you can contact for free, confidential and impartial debt advice. Money Advice Service: For free, easy-to-use money tools, information and advice, visit www.moneyadviceservice.org.uk. You can also phone 08001 387777 to speak to a money expert, use typetalk at 1800 1080 0915 4622, or add +44 77013 42744 to your WhatsApp to send a message.

Citizens Advice: For advice and information on debt and other topics, contact your local Citizens Advice or go to www.citizensadvice.org.uk.

Advice UK: Member centres offer debt advice including specialist advice for minority communities and people with disabilities. Visit www.adviceuk.org.uk

Christians Against Poverty (CAP): For free debt advice. Check postcode coverage at https://www.capuk.org then call 08003 280006.

National Debtline: If you live in England, Wales or Scotland phone 08088 084000 or visit www.nationaldebtline.org for debt advice and information.

StepChange Debt Charity: For free debt advice throughout the UK phone 08001 381111 or visit www.stepchange.org.

Money Advice Scotland: If you live in Scotland, visit www.moneyadvicescotland.org.ukwhere you can use webchat to speak to an adviser, or email webchat@moneyadvicescotland.org.uk.

Citizens Advice Scotland: For advice and information on debt and other topics, contact your local Citizens Advice Bureau, go to www.cas.org.uk, or call the Helpline on 08000 281456.

Advice NI: If you live in Northern Ireland, phone 08000 281881, email debt@adviceni.net or visit www.adviceni.net

Citizens Advice Wales: If you live in Wales, visit www.citizensadvice.org.uk/wales, or you can call Advicelink on 03444 772020 if you want to speak to someone about your debts. Calls cost the same as calls to landline numbers.

Business Debtline: If you are self-employed or a small business owner, phone 08001 976026 or visit www.businessdebtline.org for debt advice and information.