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Mortgage Holidays

Mortgage Holidays

Covid-19 has forced lenders to offer mortgage holidays which means that you can stop or reduce your monthly mortgage payments for up to three months. A mortgage holiday could be useful to bridge a short-term loss of income however it is important to remember if your household income has been permanently reduced then this solution is not suitable.Increased length of your mortgage

The length of your mortgage will increase by the three months of ‘holiday’ plus interest accrued on the remaining balance of the mortgage.

Increased size of total mortgage

Once the payment holiday comes to an end, your balance payable will be higher than when the holiday started. Interest is accrued on the balance of the mortgage throughout the period.

Credit scores are likely to be negatively effected

Once the holiday has been accepted, your credit file will most likely be affected. Some lenders are claiming that it will have no effect but there is conflicting information surrounding the topic. This could impact your ability to source finance in the future.

Even with Covid-19 in the air, it’s easier to breathe

Once you have secured a mortgage holiday you have three months of more disposable income, sigh a sigh of relief. Our suggestion is that during these three months you aim to put some of your saved income away for when the payments restart.


The use of the word holiday is a farce and a misrepresentation of reality. This is no holiday and should only be undertaken if absolutely necessary to balance your finances. Remember the decision to take a mortgage holiday will affect you for the remainder of the mortgage.


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