COVID-19 FAQ’s

 

How are Pepper supporting Customers?

As many of our Customers deal with the challenges of COVID-19, we firstly want to make sure you have all the information you need to help you understand the options that may be available to you.

To support Customers who are impacted by COVID 19, we have a number of potential solutions, including a Payment Break for up to three months, depending on the individual circumstances.

 

What is a Payment Break?

A payment break is the deferral of or reduction in loan repayments for Mortgages (for private dwellings and buy-to-lets) and Commercial Loans, for up to three months. Please note there are no fees associated with a payment break.

Payment Breaks can take several different forms depending on what best suits your specific situation.

Below we have outlined two of these options.

 

  1. ‘Moratorium’ Payment Break this means that:-
  • Your full Loan repayments (e.g. monthly payments) are deferred for an agreed period of time, so you do not make any capital or interest payments during this time;  
  • Your outstanding Loan balance will not reduce during this period;  
  • Interest will continue to accrue and be applied to your Loan during the Payment Break based on the current interest rate and in accordance with the existing terms and conditions of your Loan agreement;   
  • At the end of this period, the Loan repayments will resume (e.g. full capital and interest payments) and your Loan repayments will increase to ensure that the Loan is fully repaid within the original term of the Loan.

See more information on how a Payment Break operates below and whether this may be an option for you.

 

  1. ‘Interest Only’ Payment – this means that:-
  • You only pay the interest due on the Loan during the agreed Interest Only period, and you do not make any capital repayments. 
  • Your outstanding Loan balance will not reduce during this period.  
  • Interest will continue to accrue and be applied to your Loan during the Interest Only break based on the current interest rate and in accordance with the existing terms and conditions of your Loan agreement.   
  • At the end of this period, the full capital and interest payments will resume and your Loan repayments will increase, so that the Loan is fully repaid within the original term of the Loan.

See more information on how a Payment Break operates below and whether this may be an option for you.

 

How does a Payment Break operate?

A Moratorium Payment Break effectively gives you breathing space – a period during which you do not have to make repayments on your Loan.  

If you are offered a Moratorium Payment Break of up to three months, we will spread your deferred Loan repayments over the remaining term of your Loan, so that your Loan is repaid within the original term. This will result in an increase to the Cost of Credit * on your Loan. This means that when your repayments start again, the Loan repayment will be somewhat higher as Pepper will add the deferred Loan repayments to your overall Loan balance, to be repaid within the original term. The shorter the term left on your Loan or mortgage, the larger the increase will be on your Loan repayments, when the Moratorium Payment Break is over.

Interest will continue to accrue and be applied to your Loan during the Moratorium Payment Break based on the current interest rate and in accordance with the existing terms and conditions of your Loan agreement.

Where you have the capacity to do so, another option is to only pay the interest on the Loan as it falls due during the Payment Break. 

Under both options, a Payment Break will result in Loan repayments being somewhat higher over the remaining term of the Loan, to ensure that the Loan will be fully repaid within the original term of the Loan.     

*Cost of Credit: The Cost of Credit is the difference between the Total cost of the overall Loan prior to the implementation of a Payment Break compared with the Total Cost of the overall Loan if the Payment Break is implemented.

 

Am I eligible for a Payment Break?

If as a result of COVID 19, your income has reduced and you cannot pay your Loan repayments as they fall due or you can only pay part of your Loan repayments as they fall due, you may be eligible for a Payment Break.  This includes Loan repayments relating to a previously restructured Loan.  

Not all Customers will need the same type of a Payment Break; and we will aim to tailor a solution according to your individual circumstances.

It is important that if you can afford to continue to make Loan repayments in full, or in part, you should do so – that way you will avoid increased Loan repayments unnecessarily.  

 

Am I eligible for a Payment Break if my Loan was in arrears prior to COVID 19?

We are committed to supporting all Customers – including those Customers who were financially distressed prior to COVID 19.  

To do this, we will need to understand your individual situation to be able to consider your circumstances and discuss your options. If your financial difficulties are longer term in nature and you do not expect to return to normal payments in 3 months, we may need to look at a more permanent solution to address your financial difficulties.

This may include asking you to provide information on:

  • The reasons why you are experiencing financial difficulties 
  • An explanation of how and when you expect your situation will improve
  • Whether you can make any repayments to your Loan and over what period

If you have a mortgage on your private dwelling, you may be required to complete a Standard Financial Statement (SFS) which sets out your income and expenses, as well as providing relevant supporting documents.  We can help you complete the SFS over the phone to ensure this is as seamless and easy as possible. 

If you have a mortgage on a Buy To Let, you may be required to complete an Income and Expenditure form which sets out your income and expenses, as well as providing relevant supporting documents.  

If you have a Commercial Loan, you may be required to complete a Statement of Affairs, as well as providing relevant supporting documents. 

You or your appointed adviser should contact us to discuss the options available to you to resolve the arrears.

Link to Mortgage Arrears Resolution Booklet:

https://www.peppergroup.ie/siteassets/lending/documents/pepper-mortgage-Customers/marp.pdf

Link to Information Booklet for Small and Medium-Sized Enterprises (SME’s) in Financial Difficulties:

https://www.peppergroup.ie/siteassets/lending/documents/booklets-and-regulations/p00085_ismefd_0519.pdf

 

How do I apply for a Payment Break?

We have put in place a simplified application process which is completed over the phone to address all requests during COVID 19, as efficiently and promptly as possible.  If you are deemed eligible, you will be offered a Payment Break over the phone and provided with additional information on how your Payment Break will work.  The Payment Break will be completed on your Loan following the phone call, and you will be issued with a confirmation letter detailing the terms of the Payment Break to include what happens when the Payment Break comes to an end.  

As mentioned, we are available to help you through this process.  If you are unclear on any of the above, or you wish to discuss your eligibility for a Payment Break Please contact us on the relevant phone number under the link below, or email: comms@peppergroup.ie and we will get back to you to as soon as possible to address your query.

Links to contact numbers: Residential Mortgages | Commercial Mortgages

 

Will I be charged a fee for my Payment Break?

Pepper do not apply any fees for a Payment Break.

 

Will a Payment Break affect my credit record with the Irish Credit Bureau or the Central Credit Register?

The credit record of those Customers who avail of a Payment Break as a result of COVID 19, will not be affected.

 

Will my mortgage rate change if I avail of the Payment Break?

No, your mortgage rate will not change due to your availing of a Payment Break.

 

What happens to interest during the Payment Break?

Interest will continue to accrue and be applied to your Loan during the Payment Break based on your current interest rate and in accordance with the terms and conditions of your Loan agreement.  

 

What happens at the end of the mortgage Payment Break?

In advance of the Payment Break coming to an end, we will engage with you to understand if your circumstances have changed.  If your circumstances have improved, your Loan repayments will increase in line with the revised Loan repayment detailed in your confirmation letter.   If your circumstances have not improved or have deteriorated further, we will work with you to establish what further forbearance measures we may be able to put in place.

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