Mortgage Payment Holiday

Rhealea

We can take 12 months payment holiday on our mortgage and was thinking of doing this when I go on Maternity Leave next year.

Does anyone know how this will effect our mortgage in the long run? We currently have 18 years left.

Thanks

Jonbvn

How will a payment holiday effect your mortgage?

1. Currently, when you make a regular mortgage payment, the interest is paid each month.
2. Since you will no longer be making any payments, the interest will accrue, and the capital outstanding will increase. With £100k @6% the capital owed will increase by £6k.
3. Assuming you want to keep your payments the same, the term of your mortgage will obviously increase. Not sure by how much, since it depends on how much is outstanding and your rate.