mortgage holidays

spudmonkey_3

Hello, I was thinking about applying for a mortgage holiday for five or six months so that I can quickly pay off a credit card balance. The card is about 6.5% on the lifetime of the balance but I'd love to be rid of it. Does anyone know if this is a good or bad idea? Thanks!

beecher

Authorised arrears should be seen as a last resort as you'll be paying interest on the interest and your payments will go up at the end of it. Go onto the debt free wannabee threads and post a Statement of Affairs for help in saving money elsewhere in order to pay your credit card bill.

StuTheDon

Spud - in short it is not a good idea. it is important you dont think of your mortgage being "on hold" - you will still have interest added onto the balance so it will be more expensive in the long run.

Try and cut back on other expenses until the card is payed off.

Also, you need to look at why you ran up a credit card bill to make sure it does not happen again. The DFW board is a good help there.

spudmonkey_3

on maternity leave and my pay is about to go right down to the basic level. i have created a serious budget to avoid running up more card debt and have been managing within this but i might end up in my overdraft when my pay goes down. my mortgage is one month away from going down to 3.5% from a 5.3% fixed term which will help a bit. i have 3 to six months of leave left, really want to take it!

StuTheDon

spudmonkey wrote: »

on maternity leave and my pay is about to go right down to the basic level. i have created a serious budget to avoid running up more card debt and have been managing within this but i might end up in my overdraft when my pay goes down. my mortgage is one month away from going down to 3.5% from a 5.3% fixed term which will help a bit. i have 3 to six months of leave left, really want to take it!

Ah - did not realise you were on mat leave - congrats. Taking a mortgage holiday should be your absolute last option - it is very expensive over the long term. Good to hear you have a budget and can stick to it.

If there really is no other option then you should look into it - you may not be granted a mortgage holiday in some circumstances so dont assume you will get it. Good luck.

CLAPTON

it may make sense to take a mortgage holiday
-if the APR of your other debts is greater than the mortgage (which seems to be the case here)
-if there are no fees
-and if once you're all clear you think about overpaying the mortgage and of course don't run up any more CC debt