Money Talk
SUE’S GUIDE TO Taking A Mortgage Holiday
Think of holidays and it’s probably the beach type that comes to mind. But if you’re strapped for cash, taking a mor tgage holiday can help ease the financial strain.
So what is it? It’s like pressing the “pause” button on your mor tgage so you don’t make the usual monthly repayments. If you’ve got a good track record with paying on time, many lenders allow you to do this, subject to their own rules and time limits.
However right now, in light of the Coronavirus pandemic, Chancellor
Rishi Sunak has said any homeowners and landlords who are struggling financially can apply for a three-month mor tgage break.
You’ll need to contact your lender to agree on this – don’t just stop making payments. Once your lender gives you the green light, it means you won’t need to make mor tgage payments for three months. It’s not free cash, though, as you will need to repay the money – plus interest – fur ther down the line.
In most cases, the chunk of cash you owe can be added on to your mor tgage. This means it may take a bit longer to clear your mor tgage total.
Lenders can offer other options if you’re struggling. This can include extending your mor tgage term, or moving your mor tgage to interest-only payments for an agreed time.
You may not be able to get through to your lender right now, as they’re hugely busy. However some mor tgage providers like Nationwide and Santander can arrange mor tgage holidays online.
SUE’S TIPS:
◆ A “mortgage holiday” isn’t free cash.
It’s a way to ease pressure on your household budget by temporarily pausing mortgage payments.
◆ You will need to repay the money later, so check how much any break (with interest) could add to your mortgage.
◆ Don’t just stop paying – do speak to your lender. Helplines are hugely busy right now so it may take a while to get through.