Patment Holidays on Offest Mortgages

redskins1791

Hi Everyone,

I have had a Natwest Offset Mortgage for nearly five years now. My repayments are about £500 a month, and I have currently over paid by about £6,000 in added payments.
unfortunately I am now in a position where I have been made redundant, so thought I would take a 3 month payment holiday, while looking for work. But I have been refused this because I dont have a job or income currently coming in.
Surely if I am in credit on my mortgage, this should be allowed, whether I have an income coming in or not.

Thanks for any advice

Redskins1791

kingstreet

You are reliant on the lender's terms and conditions.

What did the key facts illustration, mortgage offer and terms and conditions say at the time you took out your mortgage?

latecomer

If the funds are in an offset savings account can you not simply use these to pay the mortgage for a couple of months?

redskins1791

Hi Kingstreet,
Thanks for your prompt reply.

On my welcoming letter it said "If you need to pay a little less from time to time, or take a payment holiday, you can. All you need to do is call us, and we will check you have enough available facility and alter your direct debit".
As the original offer letter uses the word facility in terms of my mortgage loan amount, then I presumed as long as I was ahead of payments this would be ok. There is no mention of needing an incoming salary to take payment holidays.
There is no other mention of Payment holidays on either my offer letter, legal charge document, or other documentation I received with my mortgage as far as I can see. It was the welcoming letter that alerted me to payment holidays.

Thanks

Redskins1791

kingstreet

Is it possible you took out the mortgage before the credit crunch and since then they have altered the terms to reflect the changed lending conditions in the interim?

It's possible they have invoked a clause in the terms allowing them to do this if they no longer feel it prudent to offer such a facility.

You are going to have to write to them, referring to the document you have and asking them when they gave you notice of their intention to vary your conditions.

Thrugelmir

redskins1791 wrote: »

Surely if I am in credit on my mortgage, this should be allowed, whether I have an income coming in or not.

If your lender grants the request. Then they will be in a difficult position should you not find a job in the next 3 months. So not as straightforward as you suggest.

opinions4u

redskins1791 wrote: »

On my welcoming letter it said "If you need to pay a little less from time to time, or take a payment holiday, you can. All you need to do is call us, and we will check you have enough available facility and alter your direct debit".

A paragraph that makes it quite clear that it's subject to approval.

As the original offer letter uses the word facility in terms of my mortgage loan amount, then I presumed as long as I was ahead of payments this would be ok. There is no mention of needing an incoming salary to take payment holidays.

But it doesn't say "just go ahead if you've overpaid in the past". So presumption is unwise. Calling is wise.

Surely if I am in credit on my mortgage, this should be allowed, whether I have an income coming in or not.

If what you're calling overpayments are actually a deposit in a distinct and separate offset savings account I would agree. If they are reduction in the capital balance of the mortgage then I would disagree.

The FSA is keen to ensure that any increase in debt is properly assessed before just being agreed. It would take a dim view of a lender that didn't do this.

redskins1791

Many thanks for your prompt replies, and suggestions.

I do still have some savings in another account with this bank to continue to pay my mortgage, but would have preferred a 3 month break.
It sounds like it might be easier to forget it, the annoying thing is I already had one 3 month holiday break on it a while ago, as suggested maybe their policies have recently changed.
They also say you can borrow overpayments back if your in credit on your account, im sure there is a loop hole in that, to stop it too lol.

Thanks again for your help

Redskins1791