Mortgage Holiday terms

seradane

Hello! I'm not planning to take one out (yet!) but I was reading through an email sent by Halifax regarding mortgage holidays, and the following wording caught my eye:

"If you take a mortgage payment holiday, this means that you wouldn’t make mortgage payments for up to three months and we’ll add these payments onto your mortgage balance."

I know that other sources say you'll continue to accrue interest while your payments are paused, but this here sounds like they're going to take the whole payment and add it into your mortgage? So the "cost" for these months is doubled? Surely that's not right...

Anyone able to shed some light?

davidmcn

There's a previous thread where the ambiguous wording was pointed out, but (hopefully obviously) it's just the interest which accrues and the capital amount stays static.They're not charging you for the "holiday", other than the interest mounting up at the current rate.

Thrugelmir

Interest will accrue monthly on the balance owed. Once payments recommence. The monthly amount due be recalculated to repay the debt over the remaining term of the mortgage. 

kinglotsof

Got in touch with Natwest today. Had mortgages for 25 years now with different lenders. Never missed a payment. Didn't want to pay nothing at all, wanted to pay interest only, as I thought that would be the right thing to do for our family in this climate, until we clamber out. They said that I had to be earning 75k a year for this to be possible, thats just generally. Thats their banking terms. Thats bonkers. Doesn't account for Corona-virus. I felt like they were encouraging me to have a holiday, and were certainly pushing me in that direction, as I guess in the long run they are going to profit by billions overall, as all they do is add it to the remaining term, but surely that means they end up with a larger amount overall in the end. So frustrating when all you want to do is the right thing.

Thrugelmir

Days of interest only mortgages are long gone. That's nothing to stop you taking a holiday while continuing to pay whatever you wish into the mortgage. Switching to interest only would require a new product not simply switching your existing one onto interest only terms.