Payment Holiday?
Hoopylass
Forumite 910 Posts
I received my mortgage statement today and there was a leaflet that was talking about payment holidays. It says that I can take up to 3 holidays.
I was just wondering what peoples view was on this? I was thinking about taking the holidays and using the money to pay off some of the credit cards?
I was just wondering what peoples view was on this? I was thinking about taking the holidays and using the money to pay off some of the credit cards?
Total Debt
Was £4145.81now £0.00
0
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Replies
how long are the payment holidays for?? - 1/3/6 months?
The only negative i guess is that i will increase your term (as you will be missing a number of payments) and as a result you will be charged a higher amount of interest (not much i doubt but even so)
what are you other debts?? Are they high APRS%? If they are, then it may make sense to have a 'payment holiday' - use this money to pay off other debts, which may free up additional funds to then make o/payments on your mortgage....
If you could post a few more details . debts and there APR's , plus the payments you are currently making, it would prob make the decision easier....
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The tesco credit card is 0% interest and the RBS one is 6.9% for life of balance.
I am nearly 2 years into 30 year mortgage. I am not currently making an overpayments or trying to become mortgage free in X amount of years.
Basically it would be a 2 month payment holiday which would allow me to pay £300 one month to the tesco card and £300 the next to the rbs. This would significantly reduce the balances on these and obviously the minimum payments which would leave me in a better financial position.
I am currently paying
RBS - £36 this would reduce to £28
Tesco - £40 this would reduce to £30
It might not seem a lot but trust me it would make a huge difference to me!
How long have you left on the 0% card??
What will the APR be on the 0% card when it returns to interest chargeable?
Whilst the 0% card is at 0%, it makes more sense to make payments onto a debt that is charging interest. However, if the 0% card is coming to an end, with it returning to a high APR (above 6.9% and mortgage APR%) then it would make sense to make the full £300 x2 onto the current 0% card (resulting in interest being charged at a lower outstanding amount when it returns to interest chargeable)
Share Investments: £51,390.74 / Money Owed From GS: £5,812.61
So do you think its a good idea?
Becuase you have 11 months left on the Tesco Card, i would not make o/payments at this moment. Whilst the debt is at 0%, there is no need to make o/payments as you are not being charged interest.
O/payments therefor should come off the RBS 6.9% card first.
However, you need to be fully aware what affect taking a payment holiday could have on your mortgage. As said, it may increase the term by a few months, or the term could remain the same and you payments per month go up.
I think only you will be able to make this decision, but make sure you have all the figures in front of you before making you mind up.
If you had said i have a debt at 22%, then i would have said yes to the payment holiday, but because your APRS are within whispers of each other, the decision become more complex, possibly causing a lot of hassel of maybe a few £s less interest over the term of the debts.
Maybe asking the question on the mortgage & Endowment Forum would bring further answers, of which you could make a more educated decision on. Its better to have advice from lots of people (with the correct qualifications/experience) than 1 person merely giving a single opinion.
Share Investments: £51,390.74 / Money Owed From GS: £5,812.61