How to have a mortgage payment holiday

Think of holidays and right now bet it’s the beach one you’re dreaming of. But if you’re strapped for cash in the current climate, taking a ‘mortgage payment holiday’ can help ease the financial strain.

What is a ‘mortgage payment holiday’?

It’s like pressing the ‘pause’ button on your mortgage, so you can stop making monthly repayments. If you’ve got a good track record with paying on time; most mortgage lenders will let you do this for a limited time if you ask.

However with many people struggling financially due to the Coronavirus pandemic, the Chancellor announced back in March that homeowners and ‘buy to let’ landlords can apply for a three month mortgage break.

How does it work?

You need to contact your lender to agree this; so don’t just stop making payments. Once your lender gives you the thumbs up; means you won’t need to make payments for three months.

But it’s not free cash with the slate wiped clean. You will need the repay the money, plus interest, further down the line.

In most cases, the chunk of cash you owe, can be added to your mortgage, which means future payments will go up a bit.

How can I get one?

Mortgage payment holidays are proving popular. Nearly two million of us are taking one; which works out at one in six mortgages.

Most lenders want you to apply online. You’ll find special ‘Coronavirus’ advice sections on their websites with details on how to apply.

If you’re already on one; and nearing the end; you can ask for a three month extension if you need it. And if you’re applying for the first time; you’ve got until 31st October to do so.

Quick 5 point recap

  1. It’s not free cash.
  2. It’s like pressing the ‘pause’ button on your mortgage.
  3. You will need to repay those ‘missed’ payments plus interest.
  4. Check how much this will add to future monthly payments.
  5. Don’t just stop paying. Speak to your lender first.

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