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Mortgage Payment Holiday
HMS
Posts: 49 Forumite
Hi All
I'm puzzled by the 'mortgage repayment holiday' and can't really find a clear description of what is happening anywhere. Does the skipped payment extend the duration of the mortgage, get added in somewhere else, added to the top of the loan, etc? I don't have a clue. Could someone explain it clearly for me?
Thanks a million
I'm puzzled by the 'mortgage repayment holiday' and can't really find a clear description of what is happening anywhere. Does the skipped payment extend the duration of the mortgage, get added in somewhere else, added to the top of the loan, etc? I don't have a clue. Could someone explain it clearly for me?
Thanks a million
0
Comments
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As far as I'm aware, if you take a payment holiday, it gets added to the mortgage, so you're only deferring it.0
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Payment holidays are a bad name that doesnt really match what you are doing. Its a bit like the term frozen pension which doenst mean what most think it does.
Mortgage Holidays are authorised arrears in its simple explanation. You are not paying any interest off that month so your mortgage balance will increase by the amount of the payment and future payments will either be higher to compensate or you will have to pay a balance at the end which will be higher than the mortgage payment missed as interest is charged on it.
It does not extend the term.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Payment holidays are a bad name that doesnt really match what you are doing. Its a bit like the term frozen pension which doenst mean what most think it does.
Mortgage Holidays are authorised arrears in its simple explanation. You are not paying any interest off that month so your mortgage balance will increase by the amount of the payment and future payments will either be higher to compensate or you will have to pay a balance at the end which will be higher than the mortgage payment missed as interest is charged on it.
It does not extend the term.
Ah, that makes a lot of sense. Thank you very much.0
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