Can you really take a holiday from your mortgage?

In today's world, where borrowers are dealing with rising interest rates and higher repayments, the idea of a "mortgage holiday" can sound pretty tempting. However, it's important to approach the decision of putting your mortgage repayments on hold with some consideration, as long-term it can have an effect. 

A mortgage holiday is designed to give you a breather by temporarily pausing your mortgage repayments for a specific period. It's meant for those who are facing financial hardship due to unexpected situations like an illness, accident, or job loss. The beauty of it is that it lets borrowers regain their footing without the stress of meeting their regular repayments.

But here's the thing to remember: a mortgage holiday is meant to be a short-term relief, and it should only be used when absolutely necessary. Here's why....

When you hit the pause button on your mortgage repayments, the interest on your loan keeps piling up, adding to the overall cost. So, when you eventually resume making repayments, the amount might be higher to help you catch up on the missed payments.

Plus, that accumulating interest without any repayment means you'll end up paying more over the entire term of your loan. And depending on how long you take your "holiday" for, it could even change your repayment terms.

While a mortgage holiday can be a good option if you truly need it, we strongly suggest having a chat with a mortgage advisor about some alternative options that can make repayments a little easier for you. 

Here are a few ideas to consider...

• You can temporarily extend the loan term on your mortgage, which will reduce your repayments for a short period. Later on, when your circumstances improve, you can adjust it back to the original terms.
  
  
• How about making interest-only repayments for a while? This way, you're still keeping up with the interest, and it actually saves you more than taking a complete repayment holiday.

Another option is to talk to your mortgage advisor about consolidating your high-interest loans and debts into a single manageable repayment. This often lowers your overall repayments and helps you pay off your debt faster. Alternatively, we could explore refinancing with a different lender who might be a better fit for your new circumstances.

So, while a mortgage holiday can provide relief when times are tough, it's crucial to weigh up the long-term consequences and consider alternative options with a mortgage advisor before making a decision.

Remember, you've got this! Take the time to explore your options and find the best path forward for you. Get in touch with our local mortgage advisors if you would like to discuss if a mortgage holiday is right for you.