To take a mortgage holiday

[theoneiam1]

When I don't need one?

So we can cover our mortgage payments, but if I took a 3 month holiday I could pay off a credit card and have some spare, and will only pay back an extra £10 a month.

Do they check your incoming wages when you apply for one?

Has anyone else taken one for a similar reason?

That’s an extra £10 a month for the life of your mortgage. You’re probably better off not doing this.

Do your research, it could affect you further down the line.

It won’t show on your credit file but the concern is that lenders may look negatively on this when considering you for a future mortgage in any event.

My dh asked me if we could do a mortgage holiday to pay off a debt I didn't know he had, justifying it in almost the same way as you have. I said no.

You never know what's around the corner and whether you may actually need a mortgage holiday so I would only ever use one if I absolutely had to.

That said, I doubt you'd be the only one doing it that didn't need to. It's really up to you.

No definitely not. If you go for a new mortgage in the future or want to remortgage they may well ask you if you’ve ever taken a mortgage holiday and it would reflect badly.

You'll have to pay off more later BUT if you have credit card debt that will be far more expensive and so long as you guarantee to use the money for that and to save (if you don't have a few months of earnings saved in the bank) I'd do it.
Don't use it 'to have some spare'. It will end up disappearing in daily spend and you'll be £10 a week down for a long time.

I don't know if the holiday would effect you in the future, but paying off a credit card that's attracting high interest could save a lot of money.

Well if you are paying if debt at 25% Apr or something might be worth it.

But you need to work it out for yourself

I remortgaged, staying with the same lender and i've taken pyment holiday before and they didn't even ask

Yes we're using the 2k to pay off a debt. It increased our repayments by a tenner. We're fine with this as it puts us in a better place now and for the next few years. It's nice to clear a debt

To those saying it will reflect badly. We have taken the three month holiday. And this week got a mortgage agreed in principle for a larger mortgage. They know about the holiday and they said it wasn't a problem

Mortgage holiday in normal circumstances is not viewed in a good light.

But a COVID mortgage holiday is different due to exceptional circumstances and the government had pretty much told the banks that they had to help.

Thanks everyone for your replies.
I works out wed pay back an extra £400 over the term, but I think it's worth it to clear the debt.
We won't manage to clear it otherwise so feels like a good opportunity.
I'm going to apply, so fingers crossed!

Whichever has the highest interest rate / cost.
Mortgage holiday is just that, not a discount. For as long as you understand the consequences, go for it

Look at what Martin Lewis says about it:

www.google.com/amp/s/www.bbc.com/news/amp/business-53222765

Please don't take a mortgage holiday unless it's a last resort

Mortgage holidays aren’t a cheap credit opportunity.

Google Martin Lewis and money savings expert to fully understand the financial implications.

@Beaniebeemer

Mortgage holiday in normal circumstances is not viewed in a good light.

But a COVID mortgage holiday is different due to exceptional circumstances and the government had pretty much told the banks that they had to help.

I had a mortgage holiday 2 years ago as dp broke his leg and was out of work for 4 months (company sick pay is shit)

We have just had a mortgage in principle agreed for a much larger house and they said it didn't matter and wasn't something they looked at.

Make sure they tell you how much more it's going to cost you because £10pm/£400 in total doesn't seem right.

It's 4am and I feel sick, so I can't think this through properly right now, but it doesn't seem right to me.

Hi OP, I did this right at the first opportunity in order to get some savings generated as after a few large unexpected expenses we had hardly any left and it was keeping me up at night. A lot of people think we are insane.

I worked throughout (NHS) but my husband is self employed and couldn’t so we lost a significant amount of income. We could have just about paid it on my wage alone but we decided it was more beneficial to take the holiday and put the money away. I feel so, so much calmer now that we have that amount saved.

The Government made the banks offer this, and made it so easy - it took a couple of minutes to apply. I’ve got one more month left. There will be no impact on our credit file.

They are offering to extend for another 3 months now, but as my husband is back to work we’ve declined.

Worth the additional repayment for peace off mind for us - however, we will repay it quicker than the full term as I’ll pay an extra 10% each month until the additional balance has gone.

You just need to weigh it up for yourself - in my opinion, I will probably never have the opportunity to put that much away monthly again so it felt reasonable.

If it does end up affecting your credit file despite the promises that it wouldn’t it will surely open up the floodgates for compensation.

@Beaniebeemer your "credit file" (aka credit score / rating) is not the only thing banks considering when deciding to lend to you.

If you go to carphone warehouse tomorrow and take out a new contract on an iphone i believe they will check your credit score and if it is over a certain threshold, all good, you'll be approved.

When you take out a bank loan (e.g. for home improvements), mortgage or remortgage your credit score is just one factor that's relevant. If you have a poor credit score you'll fail at the first hurdle. If you have a decent credit score you'll move to the next phase. That's when the mortgage holiday might become an issue.

Some lenders might refuse to lend (despite a perfect credit score) because you have had a mortgage holiday.

The article explains it quite well.

It is not fullyknown yet, how you will be judged in future mortgage / remortgage applications if you have had a mortgage holiday.
That being said, there are purchases and remortgages going ahead every day for people that were on furlow or taken a holiday and have NOT been declined due to this. The applications being declined are mainly self employed clients that took the SEISS grant.
We took a payment holiday immediately as I was initially on furlow and DH had his overtime cut, as it happened we both returned to normal quite quickly so has managed to save a lot of money in three months we would not be able to under normal circumstances.
My fixed rate is ending next month, and my lender have offered me a fantastic rate, saving me over £200 per month so they certainly are not using it against us. I have seen lots of scaremongering on here about this, but I work in the industry.