Does taking mortgage breaks effect mortgage applications?

[Tampon]

We are going to put our house on a buy to let mortgage and buy another house due to having difficulties selling it since Brexit. We are moving from Surrey to Dorset and would like to get down there now so are prepared to compromise and get a smaller house for the next 5 years then sell up both and get a nice pad. We have 25% min for the buy to let and around 40% deposit for the new place.

We have a mortgage break clause in our current which means we will be at the end of our 5 year fixed term and won't have a £5k redemption payment to make.

We have the opportunity to have a 6 month mortgage break with our current one. This will allow us to save another £5k before the new house purchase. We have asked our mortgage broker if it would be viewed unfavourably when we apply for new mortgages soon. He says it won't affect anything at all as it is based on what we earn and can afford.

I have read here that it could affect your credit file.
https://www.moneyadviceservice.org.uk/en/articles/...

Are there any knowledgeable folks here who could clarify the situation? Ideally the extra £5k would be useful (but not necessary) to have in the bank but I don't want to effect the mortgage applications in any way what so ever.

Thanks for the advise.

[Tampon]

I thought it would not be a good idea, but the broker was adamant it made no difference.

It didn't effect income or expenditures as we would be saving the money rather than using it to pay for other things so therefore proving we could afford it if needed.

I am worried about either not taking it out of fear and missing out on £5k in my pocket which would help with buying a new place and having a nest egg for the rental as a fallback or doing it and reducing the amount that would be loaned to us just for £5k!

[Tampon]

Fantastic, thank you two very much for your advise, very useful. Yes it is payment holiday we are talking about.

So basically I could get the extra money in cash but my mortgage bill I need to settle would go up as well.

Would I come out with any extra cash in my hand in this situation or am I just swapping money here for money there? It is a repayment mortgage I am on. I am thinking I would save the capital repayment part. We are 4 and a half years into a fixed term deal and we pay £785 at 4% at the moment.

Edited by Tampon on Sunday 4th September 22:40

[Tampon]

Thanks for trying to help explain it. I feel I am not fully grasping it though.

I would be ditching this mortgage as soon as May comes around and there is no penalty charge (£4k) to pay then as I can get a much better rate as I have a much higher deposit amount now. This would mean 6 months of no mortgage payments, save the money and then one slighty increased monthy payment then bye bye old 4% mortgage and hello cheaper one.

If I am just saving £5k in the bank and then having to pay off an extra £5k on my mortgage in May when I change mortgage providers then it doesn't make any sense to do so I don't think. If I end up with extra cash going into double house ownership then it might be worth it.

Very confused

[Tampon]

Cheers guys for the help.

I was trying to figure out if I had for the sake of this, a 100k mortgage, didn't pay it for 6 months and saved 5k when I remortgaged in 7 months time would I have £100k debt to pay off (negating the saving 5k totally) or would I have say a £102k mortgage (basically I save the capital payments but I still pay the interest overall.

Feels like I am being too clever and missing the obvious here.