Have you taken a mortgage holiday.....

[Beaniebeemer]

On Friday 22 May, the FCA announced proposals to extend mortgage payment holidays.

If you have already taken a holiday will you be extending?

We are in a crappy position at the moment as OH isn’t working and I’m only working part time. I am worried though (regardless of what has been said) about the impact on your credit score.

I'm guessing missing a payment without having arranged a holiday would have a worse impact?

We haven't done it due to covid but we did do it a fee years ago when I went onto unpaid mat leave - there was no effect on our credit ratings? It was an arranged thing with the bank and something they offered to customers who had mortgages for over 12 months anyway.

Lots of people I know have taken one even though they didn’t need to, they see it as the only chance to take such a break and not have an impact on their credit rating.

We have taken the 3 months one but won’t be extending it further as the additional cost will just be too high when we have to pay again. I think after the 3 months it will go up £30 a month on top of the original payment.

We took the three months. We have had a drop in earnings but also a drop in outgoings. We put the saved money straight into savings so have more savings than ever before.
Might extend might not. Will have to look at the difference it will make after. Although saving an extra £3000 sounds good.

I’m tempted. Our household income has dropped about 25%. We can certainly cover our essential outgoings but we aren’t adding to savings. I’m wondering whether to take the holiday in order to build up more is a cushion. Although of course long term I’m better paying the mortgage down as the interest on the mortgage is higher than the interest I’d get in savings.

@PeppaisaBitch

I assume you have taken into account that the total cost of your mortgage will go up? You will incur additional interest on postponed principal and accrued regular interest. I doubt that savings interest rate will cover this.

Just make sure you've really looked at the long term implications, and that you really need to take it up, eg due to having a lot less income come in, the need to build up savings before a likely redundancy or to pay down much higher-interest debt.

Even quite a short holiday can end up with significantly more to pay in the long term due to compounding interest.

I know it will go up. It's not about making money. I now have money in savings that I didn't have before. In case my car breaks down or whatever. I might be down over the course of 25years but for now I'm in a better financial position.