Am I a genius or is this a stupid idea? payment holiday to avoid SVR and move house

getmore4less

payment holiday is not the same as interest holiday

HCIMbtw

Densol said:

Oh my you have no idea OP
A mortgage HOLIDAY is not sunning oneself on a beach whilst the nice building society pay the mortgage for you.
its just deferring paying whilst the debt AND interest at the current applicable rate keeps on mounting up.
it will affect your credit score
you wont avoid the standard rate 
it may cause you to be refused a mortgage

I mean i do have an idea.. i i understa this entirely

Conversely u seem to be unable to read

HCIMbtw

haras_n0sirrah said:

A client of mine had an aip in feb to port a nationwide mortgage. Lockdown happened and unbeknownst to me they took the payment holiday despite income not being affected (they cleared credit cards with it) find a property in june and lender declined the port due to the payment holiday and 'they didn't feel it was right to increase the burden at this difficult time' -- put in an appeal as client never been in a better position due to having cleared debt and mrs worked in a supermarket so getting a lot of overtime. Appeal declined as they shouldn't have taken the holiday unless unable to pay the mortgage. Got them a mortgage with Halifax but they have a 7k erc to pay. Dont take the holiday unless you need it 

Useful context, thanks

HCIMbtw

davidmcn said:

HCIMbtw said:

however there might be value in a holiday for two months if it essentially extended my 1.7% fixed rate mortgage for 2 months..

How would it do that? Your fixed rate ends on the date it's meant to, and you're then onto the SVR (whether or not you're actually making payments towards it).

I was questioning if the payment holiday might defer your cotnracted fixed rate period, it seems far more likely that it wouldnt, but id rather ask the question

SuperHan

HCIMbtw said:

davidmcn said:

HCIMbtw said:

however there might be value in a holiday for two months if it essentially extended my 1.7% fixed rate mortgage for 2 months..

How would it do that? Your fixed rate ends on the date it's meant to, and you're then onto the SVR (whether or not you're actually making payments towards it).

I was questioning if the payment holiday might defer your cotnracted fixed rate period, it seems far more likely that it wouldnt, but id rather ask the question

Mine did. I'm with HSBC and the end of my fixed rate term has been extended by the three months I didn't pay. I suggest speaking to your bank to see if they offer the same. 

RelievedSheff

Be very wary of taking a payment holiday if you require another mortgage on the new property. Many lenders are declining applications from people who have taken mortgage payment holidays. You also have the added difficulty of your wife being furloughed. Lenders are being cautious about applications from people on furlough as well right now.

Crashy_Time

tom9980 said:

There are cases where lenders are ignoring portions of income where someone has been on furlough under the assumption they are likely to become unemployed sooner rather than later. Adding into the mix a mortgage holiday would be extremely unwise. It may be a good idea to seek the advice of a broker now.

Good advice.

Crashy_Time

haras_n0sirrah said:

A client of mine had an aip in feb to port a nationwide mortgage. Lockdown happened and unbeknownst to me they took the payment holiday despite income not being affected (they cleared credit cards with it) find a property in june and lender declined the port due to the payment holiday and 'they didn't feel it was right to increase the burden at this difficult time' -- put in an appeal as client never been in a better position due to having cleared debt and mrs worked in a supermarket so getting a lot of overtime. Appeal declined as they shouldn't have taken the holiday unless unable to pay the mortgage. Got them a mortgage with Halifax but they have a 7k erc to pay. Dont take the holiday unless you need it 

Yep, if it looks too good to be true...etc. etc.