Money Moral Dilemma: Should we take a mortgage holiday even though we don't need one?

edinburgher

I did exactly this, now regretting it as it appears the whole "it won't affect your credit history" chat that was so prevalent isn't the whole picture and that this may affect our chances of remortgaging!

Pollycat

Matt8888 said:

MSE should probably not have chosen to use this question because it implies that a mortgage holiday is free, especially if people just read the question and don't read the comments posted.

I agree with this.

Especially as MSE have included mortgage holidays in one of their guides.

It states:

Mortgage payment holidays if you're struggling to pay

Most importantly, I don't believe this should stop anyone who needs a mortgage holiday from getting one – if it's crucial for cash flow, just do it. Yet for those on the border, who may find it temporarily useful but can cope without it, add this to the fact that interest racks up during the payment holiday and I'd err on the side of caution.

So what part of 'struggling to pay' and 'need' a mortgage holiday does this (non) dilemma cover?

tain

We did this as well, and we're still happy we did as we've had some unforeseen consequences of CV19 that the money may still help with (wife made furlough even after being told 100% wouldn't be, then even a chance of redundancy).
My wife might now look into another career, so we're considering extending the mortgage holiday. We've fixed our mortgage for five years recently, and have little other need for credit, so doubt the impact on our credit file will be significant. If we don't need the money, we overpay our mortgage to reduce the debt. 

Potbellypig

edinburgher said:

I did exactly this, now regretting it as it appears the whole "it won't affect your credit history" chat that was so prevalent isn't the whole picture and that this may affect our chances of remortgaging!

Yes, I think a lot people may find this out in the coming years. The holiday was there for people that needed them and it looks like there will be a consequence of those that didn't need them but took it anyway. 

daveyjp

No moral issue.  I had a mortgage for years which allowed a mortgage holiday to be taken at any time.

I never did, but I did use the overpay and instant drawdown facility a couple of times for expensive purchases as it was very cheap money.

Pollycat

edinburgher said:

I did exactly this, now regretting it as it appears the whole "it won't affect your credit history" chat that was so prevalent isn't the whole picture and that this may affect our chances of remortgaging!

In case you've not read it, the 'credit history' potential issue is discussed in the MSE article I mentioned in my post below yours - you'd need to scroll down:

https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/?_ga=2.208092561.2090959324.1589525424-1511372604.1589525424

DPS-2016

Whilst clearing debt is ideal, and mortgage holidays are not free, the principle of clearing more expensive debt with cheaper debt is sound - just make sure you don't take the holiday and spend it on non-necessities!  

edinburgher

Pollycat said:

edinburgher said:

I did exactly this, now regretting it as it appears the whole "it won't affect your credit history" chat that was so prevalent isn't the whole picture and that this may affect our chances of remortgaging!

In case you've not read it, the 'credit history' potential issue is discussed in the MSE article I mentioned in my post below yours - you'd need to scroll down:

https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/?_ga=2.208092561.2090959324.1589525424-1511372604.1589525424

It may be now, but it wasn't when we applied

dunstonh

This is a copy and paste from guidence from the FCA:

Payment holidays and partial payment holidays offered under this guidance should not have a negative impact on credit files. However, consumers should remember that credit files aren’t the only source of information which lenders can use to assess creditworthiness.

It basically confirms that holidays will not have a direct impact on credit files.  However, lenders are free to use the information that shows missed payments as they wish.

Pollycat

edinburgher said:

Pollycat said:

edinburgher said:

I did exactly this, now regretting it as it appears the whole "it won't affect your credit history" chat that was so prevalent isn't the whole picture and that this may affect our chances of remortgaging!

In case you've not read it, the 'credit history' potential issue is discussed in the MSE article I mentioned in my post below yours - you'd need to scroll down:

https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/?_ga=2.208092561.2090959324.1589525424-1511372604.1589525424

It may be now, but it wasn't when we applied

Didn't Martin advise right at the beginning that you should only take a payment holiday (of any sort) if you really needed to?