You had until 31 March 2021 to apply for a coronavirus mortgage payment holiday. You might still be able to apply for a mortgage payment holiday, but these are different to what was available before 31 March 2021. Find out how mortgage payment holidays work, the circumstances in which you might be granted one and the pros and cons of getting one.
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You had until 31 March 2021 to apply for a coronavirus mortgage payment holiday.
If your payment holiday has ended, or is coming to an end, it’s important you understand what happens next and what extra support might be available.
Mortgage payment holidays might still be available under certain circumstances, but these are different to coronavirus mortgage payment holidays.
The main difference is payment holidays not related to coronavirus will show up on your credit file and might affect your credit score.
You can no longer apply for a coronavirus mortgage payment holiday. But, if you meet certain conditions, you might still be able to get a mortgage payment holiday.
A mortgage payment holiday is an agreement you might be able to make with your lender allowing you temporarily to stop or reduce your monthly mortgage repayments.
For example, depending on your circumstances and previous payment history, you might be able to take a break for usually up to six months:
Not all mortgages offer the option of a mortgage payment holiday – it depends on the product’s terms and conditions.
Whether you’re eligible to take a payment holiday, for how long, and the conditions you must meet first will depend on:
Often, in order to qualify for a payment holiday, you’ll need to have previously overpaid your mortgage.
That means paying more than your agreed monthly payments until you’ve built up enough credit to take a break from payments.
However, your lender might also allow you to reduce or suspend mortgage payments if you’re temporarily struggling to meet the monthly cost due to a change of circumstance, such as redundancy or going on maternity leave.
If you’re in mortgage arrears you won’t be eligible for a mortgage payment holiday.
But don’t let that stop you contacting your lender. They will be keen to help you come to an arrangement.
The biggest positive about a payment holiday is that it relieves some pressure for a while.
For a period of time, you have one less thing to worry about when considering your outgoings.
If you are only facing a temporary drop in income, perhaps because you or your partner are having a baby and the mortgage holiday is to cover the maternity leave period, this can be a sensible move.
While a mortgage holiday can be a useful short-term solution, it is not suitable if you can’t afford your mortgage payments because your household income has reduced permanently.
There are several important things to bear in mind:
Use our Budget planner to work out how much you have coming in and going out and see if there’s a way you can cut non-essential spending to help you meet your mortgage payments.
If you’re thinking about a payment holiday because you’re struggling to meet your mortgage payments or in danger of falling into arrears, talk to your lender as soon as possible about an alternative solution.
Lenders would much rather come to an agreement that’ll allow you to continue paying your mortgage at a reduced rate.
If you’re not in arrears but are finding it hard to meet your repayments it could be a good idea to shop around for a cheaper mortgage deal.
Remember, taking a mortgage holiday is only suitable as a temporary measure – and only when you have enough equity (capital) in your property to prevent you falling into unmanageable levels of debt.
Check with your lender and have a look at your mortgage terms and conditions to see if you’re able to take a mortgage holiday and if they are allowed under your mortgage agreement.
The criteria will vary from lender to lender.