Is it possible to change temporarily to interest only?

[Rebelwithallthecause]

We took the initial 3 month mortgage holiday as we were both on furlough.
I’m now out of work but husband is back to work.
I’ve been offered the extended mortgage break but been warned this may affect future borrowing so I am wary of doing it and use credit cards instead to help worth the shortfall.

I wondered if asking for a temporary reduction to interest only mortgage would be better and not have an affect on future borrowing.

Our lender is nationwide if anyone has experience of this

thank you

You really just need to speak to them so much could just depend on your LTV ratio, any over payments you've made previously, the mortgage deal you have with them.

Is extending the term an option?

Unfortunately I don't think this is a thing, no. It would be a complete remortgage process if you want to change the type of mortgage you have to interest only, it's not something you can do temporarily and then switch back

Plus if you temporarily swap to interest only, that could also be considered to be negative on your credit file, or internally with your lender at least.

Isn't building up debt on credit cards going to be very expensive? For that reason alone, it's probably better to take a second mortgage holiday, and perhaps review your finances, to see if you can make savings elsewhere to cover the income gap because unfortunately, while you're out of work, you might not be able to afford to repay new borrowing, so paying high credit card interest to avoid taking a holiday from your mortgage payments in an attempt to protect your credit rating probably isn't wise anyway.

It depends on your mortgage terms and conditions.

When I was temping and getting 'as and when' hours, Nationwide let me change to interest only, but it was a temporary thing until I found full time permanent work.

The debt was accruing the whole time.

We took the 3 month payment holiday, and now have 3 months interest only. This is with Virgin money

It depends on the lender but normally a switch from repayment to interest only will involve a new application as you're switching products.

I work in mortgages I would not worry too much about future borrowing the main question is can you afford the current mortgage on one salary? If you can pay the mortgage do that and don’t take the further payment holiday. Check Martin Lewis out re payment holidays. I am worried about you using a credit card though to cover a shortfall this is the one way debt is sure to spiral out of control. You need to speak to Nationwide advise them that your circumstances have changed complete a full personal budget questionnaire showing your joint income against expenditure inc unsecured debts once your mortgage lender understands more fully they can offer you the best option.