Will lender frown upon me putting our holiday on a credit card?

M62

Hi all. Last year we booked a large holiday with our kids and other friends. We are still paying down the balance by 300 a month and have 1200 left to pay.

We also have about six months until our new build house is released for sale so we have to make sure we reach our deposit target by the time we reserve the plot (est July).

In order to help cash flow, I have a credit card that has a large limit which I’ve kept for a ‘rainy day’. I was thinking of putting the remaining holiday balance on this card and then using the 300 a month to go in our house pot. I know it’s shifting debt from one area to another, with interest, but it may mean we can chuck more money in our pot a bit quicker in the interim?

I would still make payments to the card but it wouldn’t need to be as much as 300 a month. Apart from our rent this is our highest monthly outgoing at the moment.

I may have not thought this thru correctly so just wanted other opinions please? Would doing this reflect badly on us in anyway when it came to apply for a mortgage?

[Deleted User]

They won't frown on the holiday. Unless of course it's to Lanzarote.

The only issue is whether the additional debt causes them any concern in the wider picture. How tight is your affordability? Do you not have any savings at all you can use to pay for the holiday?

silvercar

If you are paying interest on the credit card debt then overall you are losing out.

Lenders aren't stupid and if affordability is tight they may offer the mortgage conditional on you clearing the credit card debt.

Retired_Mortgage_Adviser

Tbh, a £1,200 balance on your credit card isn't the end of the world when it comes to affordability calcs. a mainstream lender may use around 3% monthly outgoing for a cc balance which would come to £36/month. Unlikely to significantly affect your affordability unless it's that tight.

Does continuing to pay down the debt at 300pm mean that you won't have the required deposit come July?

It won't have an effect on the affordability calcs, but can you not get a new 0% cc to hold the 1200 balance so you're not paying sky high rates?