We have been considering applying for a mortgage holiday and weighing up the pros and cons.
Our incomes / jobs are holding up - for now - with neither of us furloughed. However we do have two properties that are let out and a mortgaged family home, and although our tenants are likewise coping ok for now on the job front, we are conscious our situation or theirs could change very quickly.
I appreciate mortgage holidays are not a new invention, but as far as I am aware banks normally require you to jump through hoops to apply, whereas the process is currently very easy and it seems to be a case of if you ask, you get. If banks get stricter on loan criteria in the future (which they surely will), I'm concerned there's a risk we wouldn't qualify.
For peace of mind I had therefore had in mind potentially applying for mortgage holidays across our properties and setting the funds aside so that IF we lost our jobs AND exhausted our savings AND there was any issue with our tenants's jobs we could keep the lights on for a further 3 months.
However, I've been told taking a mortgage holiday should be an absolute last resort, as, although it won't affect your credit rating (so they say, at least!), banks will likely still decline candidates who have taken a mortgage holiday. I.e. you wouldn't be rejected outright at the first hurdle, but it will come up as part of your application and a bank may decline to lend, or offer worse rates. In short, our options when it comes to remortgage will be limited.
I was shocked but in fairness, every time we have remortgaged we have been asked whether we have ever taken a mortgage holiday.
I am now torn between the extra peace of mind that 3 x 3 months' buffer would give us, and the risk of securing worse rates in future.
I'm not concerned about the increased mortgage payments going forward as our plan is to sell up in the UK in about 5 - 7 years anyway and relocate to my DH's home country.
Thoughts?