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

Glesgaguy

I'm not an expert but the payment holiday may be of advantage to those who intend moving home soon as the payments saved may be far greater that the additional interest which will be added. Does anyone know if this is correct mathematically

sharpe106

the payments would have taken the mortgage amount outstanding down anyway so would make no difference to how much could borrow. 

crmism

It is always wise to reduce or eliminate the most expensive borrowing first, so do as you intend and elect for the holiday provided the lender hasn't imposed a penalty or additional charge for doing so.
This isn't just my advice, it's the course recommended to those working in the industry by the financial services regulator.

silvercar

crmism said:

It is always wise to reduce or eliminate the most expensive borrowing first, so do as you intend and elect for the holiday provided the lender hasn't imposed a penalty or additional charge for doing so.
This isn't just my advice, it's the course recommended to those working in the industry by the financial services regulator.

They also say to prioritise secured debt over non secured debt. Your home is at risk......

silvercar

If you are on an incredibly good mortgage deal now, taking a payment holiday won't extend that deal, so if you are paying a lower interest rate now than you will be able to get in the future, it may be worth keeping to it.

Thrugelmir

Glesgaguy said:

I'm not an expert but the payment holiday may be of advantage to those who intend moving home soon as the payments saved may be far greater that the additional interest which will be added. Does anyone know if this is correct mathematically

There's no interest saving by not making the payments. Totally the reverse as the debt owed compounds every month as the interest gets added. 

goatfaced

Morally you may have to lie on your application.
I was asked if my income was affected by the virus, and it was because overtime and expenses payments weren't paid end of march and I didn't know when they would be paid. I still got my usual salary but I was out of pocket on my expenses which I had of course already paid out. So I wasn't lying. 

goatfaced

goatfaced said:

So I wasn't lying. 

With hindsight I only needed a one month holiday but I got three anyhow.
It's not free money but like you I have debt and this gave me more income to chuck at it, reducing the time it will take to clear. It made sense in my situation where I'm using all spare money to reduce the 0% credit card debt before it needs transferring again.

JayD

No, you shouldn't.

goatfaced

Depends though, they say they're not struggling financially but I'd say they are, because they have debt. I would say I am struggling financially even though we are both still getting our full wage, because I don't think we should have debt. Things would get precarious if credit cards stopped offering cheap transfers, upped minimum repayments etc for people who are trying to clear debt with not much disposable income. Getting out of debt would be priority for me and my mortgage is fixed for another 6 years, I've done a spreadsheet and it's not worth switching.