Payment holidays...

babyhell

Does anyone know how likely it is that I could take a 6 month payment holiday as soon as I come out of my fix with my existing lender (2yr 70% repayment, 30% interest only)?

I want to go travelling for a bit with my child before he starts school and the only time I can take a sabbatical happens to be the month the fixed term ends.

- Am I likely to get tied into something else with my current provider without having the option to shop around?
- Would it be better/possible to try to negotiate a holiday starting before the fixed term ends?

Any suggestions, advice on the implications, brainwaves would be really appreciated. I'd like to have a sensible plan up my sleeve before I speak to them in person…

Cheers
PS: I'm not sure whether payment holidays are sensible or not but at the end of the day, it's a question of more money v. spending some quality time together before we get tied into school holidays - I'm afraid the never to be repeated quality time wins!

silvercar

Are there penalties if you redeem your mortgage before the end of the fixed rate? If they aren't I would be inclined to move to a new deal now. This means you will have built up a payment history before you ask for a payment holiday.

If the penalties to moving the mortgage are too great, at the end of the fixed rate you will normally automatically transfer to the standard variable rate. You are unlikely to be allowed a payment holiday before you have made a few payments with your new lender. If you want to do this you may find you have to stick to your existing provider. Ask before the fixed rate ends what deals are open to you and choose the one you want. At the same time you can enquire about a payment holiday.

A 6 month payment holiday seems a long time; in terms of the number of payments you will be missing and the likelihood of your provider allowing you to do it.

KTF

The easiest way would be to contact the lender. Nationwide give you the option to take a payment holiday after a year (I think) but other lenders have different policys. I doubt any new lender will let you sign up then not pay anything for 6 months though.