Mortgage holidays
Discussion
I would continue to make your payments, if you can afford to, otherwise you will be worse off.......and don't take the holiday prematurely, you may actually really need it down the line and if they've already given you the three month holiday, they may not help you in the same way again......
From my understanding, it's all a con. The banks are not the sweet, kind, lovable people helping those in need in times of crisis which some of the "3 month payment holiday" headlines are implying. They aren't giving anything away, they aren't taking a hit. They're just taking more, long term.
You're just fecking yourself over long term with a higher mortgage balance. I would not be taking a mortgage holiday unless I quite simply had no other choice, just like I wouldn't take out a payday loan unless I had no other choice.
You're just fecking yourself over long term with a higher mortgage balance. I would not be taking a mortgage holiday unless I quite simply had no other choice, just like I wouldn't take out a payday loan unless I had no other choice.
whatxd said:
From my understanding, it's all a con. The banks are not the sweet, kind, lovable people helping those in need in times of crisis which some of the "3 month payment holiday" headlines are implying. They aren't giving anything away, they aren't taking a hit. They're just taking more, long term.
You're just fecking yourself over long term with a higher mortgage balance. I would not be taking a mortgage holiday unless I quite simply had no other choice, just like I wouldn't take out a payday loan unless I had no other choice.
Can't disagree.You're just fecking yourself over long term with a higher mortgage balance. I would not be taking a mortgage holiday unless I quite simply had no other choice, just like I wouldn't take out a payday loan unless I had no other choice.
I've had a lot of clients contact to see if it's a good idea to take the "free payment holiday"..........without knowing that your missed payments are simply added to the loan.
By all means, if things are tough, do it.........if it's the difference between food and the mortgage, utilise it........but otherwise, if you can maintain your payments, then do so, as you'll be better off.....
whatxd said:
You're just fecking yourself over long term with a higher mortgage balance.
Sarnie, with the above in mind, is a 3 month deferment really that much of a screwing?For someone with 38 years left on their mortgage and a whopping balance, are they likely to see more of a substantial difference in their monthly payments than someone with, let’s say, 2 years and a few grand left on their mortgage?
What about those on fixed terms? Is it just the fixed term payments that go up? Or is it spread over the whole balance?
Genuinely curious because I can’t see how a 3 month “holiday” can add such a huge amount later down the line. I thought that 3 months amongst the length of (most young people’s) 20+ year mortgages would make the difference in payments negligible?
What am I missing?
roadsmash said:
Sarnie, with the above in mind, is a 3 month deferment really that much of a screwing?
For someone with 38 years left on their mortgage and a whopping balance, are they likely to see more of a substantial difference in their monthly payments than someone with, let’s say, 2 years and a few grand left on their mortgage?
What about those on fixed terms? Is it just the fixed term payments that go up? Or is it spread over the whole balance?
Genuinely curious because I can’t see how a 3 month “holiday” can add such a huge amount later down the line. I thought that 3 months amongst the length of (most young people’s) 20+ year mortgages would make the difference in payments negligible?
What am I missing?
This is how I've seen it - I pay about £280/month in interest, so it'll just be another £840 added to the loan which I still have to pay off over 28 years. Not enough thinking outside the box with finances - most people just see "it'll cost more in the long run" rather than thinking a)You could die before it's paid off so there's 3 months mortgage money you could have had now but didn't take. b) Interest rates have fallen so your mortgage payments may come down, so you might not end up paying back any more than you already do. c) you'll probably be on more money as your career progresses therefore paying back the money becomes easier with time. d) If you don't need the money now, take it and pop it in savings - you could then either use it if you need it in the future, use it as a loan in the future or pay off some of your capital thus reducing future payments anyway. For someone with 38 years left on their mortgage and a whopping balance, are they likely to see more of a substantial difference in their monthly payments than someone with, let’s say, 2 years and a few grand left on their mortgage?
What about those on fixed terms? Is it just the fixed term payments that go up? Or is it spread over the whole balance?
Genuinely curious because I can’t see how a 3 month “holiday” can add such a huge amount later down the line. I thought that 3 months amongst the length of (most young people’s) 20+ year mortgages would make the difference in payments negligible?
What am I missing?
roadsmash said:
Sarnie, with the above in mind, is a 3 month deferment really that much of a screwing?
For someone with 38 years left on their mortgage and a whopping balance, are they likely to see more of a substantial difference in their monthly payments than someone with, let’s say, 2 years and a few grand left on their mortgage?
What about those on fixed terms? Is it just the fixed term payments that go up? Or is it spread over the whole balance?
Genuinely curious because I can’t see how a 3 month “holiday” can add such a huge amount later down the line. I thought that 3 months amongst the length of (most young people’s) 20+ year mortgages would make the difference in payments negligible?
What am I missing?
If you take the three month payment holiday, then you will be worse off. It's impossible to quantify how worse off every individual would be.For someone with 38 years left on their mortgage and a whopping balance, are they likely to see more of a substantial difference in their monthly payments than someone with, let’s say, 2 years and a few grand left on their mortgage?
What about those on fixed terms? Is it just the fixed term payments that go up? Or is it spread over the whole balance?
Genuinely curious because I can’t see how a 3 month “holiday” can add such a huge amount later down the line. I thought that 3 months amongst the length of (most young people’s) 20+ year mortgages would make the difference in payments negligible?
What am I missing?
My point was that a lot of people think they are getting a "free" payment holiday but you aren't.........and as I said, if you've lost your job or are really struggling, then utilise it for sure.........but if not, then carry on, otherwise you will be worse off.
i know I'd be a few quid short every month but its less than £10 and would be a good chunk of cash to keep in hand while this blows over.
Stop paying for 3 months, put the saving into an account, when all returns to normal if I've not needed it i could overpay it all back, sure it might cost me a few pence a month after that becasue of the extra interest but affords me a level of flexibility i wouldn't otherwise have.
If i do need to i might be £10/month worse off going forwards, didn't seem to be a major downside to it other but as pointed out...if i actually need a holiday later on down the line it might not be available to me and thats probably more important given the future uncertainty.
Stop paying for 3 months, put the saving into an account, when all returns to normal if I've not needed it i could overpay it all back, sure it might cost me a few pence a month after that becasue of the extra interest but affords me a level of flexibility i wouldn't otherwise have.
If i do need to i might be £10/month worse off going forwards, didn't seem to be a major downside to it other but as pointed out...if i actually need a holiday later on down the line it might not be available to me and thats probably more important given the future uncertainty.
andburg said:
i know I'd be a few quid short every month but its less than £10 and would be a good chunk of cash to keep in hand while this blows over.
Stop paying for 3 months, put the saving into an account, when all returns to normal if I've not needed it i could overpay it all back, sure it might cost me a few pence a month after that becasue of the extra interest but affords me a level of flexibility i wouldn't otherwise have.
If i do need to i might be £10/month worse off going forwards, didn't seem to be a major downside to it other but as pointed out...if i actually need a holiday later on down the line it might not be available to me and thats probably more important given the future uncertainty.
I like compounded figures, you say £10 and I agree its nothing, but its £120 a year for say 20 years for argument sake, so thats £2400, thats a lot for a 3 month mortgage breakStop paying for 3 months, put the saving into an account, when all returns to normal if I've not needed it i could overpay it all back, sure it might cost me a few pence a month after that becasue of the extra interest but affords me a level of flexibility i wouldn't otherwise have.
If i do need to i might be £10/month worse off going forwards, didn't seem to be a major downside to it other but as pointed out...if i actually need a holiday later on down the line it might not be available to me and thats probably more important given the future uncertainty.
Birkin1932 said:
andburg said:
i know I'd be a few quid short every month but its less than £10 and would be a good chunk of cash to keep in hand while this blows over.
Stop paying for 3 months, put the saving into an account, when all returns to normal if I've not needed it i could overpay it all back, sure it might cost me a few pence a month after that becasue of the extra interest but affords me a level of flexibility i wouldn't otherwise have.
If i do need to i might be £10/month worse off going forwards, didn't seem to be a major downside to it other but as pointed out...if i actually need a holiday later on down the line it might not be available to me and thats probably more important given the future uncertainty.
I like compounded figures, you say £10 and I agree its nothing, but its £120 a year for say 20 years for argument sake, so thats £2400, thats a lot for a 3 month mortgage breakStop paying for 3 months, put the saving into an account, when all returns to normal if I've not needed it i could overpay it all back, sure it might cost me a few pence a month after that becasue of the extra interest but affords me a level of flexibility i wouldn't otherwise have.
If i do need to i might be £10/month worse off going forwards, didn't seem to be a major downside to it other but as pointed out...if i actually need a holiday later on down the line it might not be available to me and thats probably more important given the future uncertainty.
roughly a loan of £1900 at say 20 years, 2.5% apr is £10/m and £2410 total repayable, that means its cost you £600 over the 20 years (2.50/month to borrow that cash) and much much less if you dont spend it and drop it back into the mortgage as a lump sum after 6 months.
irocfan said:
AIUI it also impacts your credit rating - no problem for an old fart like me with a nearly gone mortgage but for youngsters.....
I don’t believe anyone taking a mortgage holiday agreed with their provider will have their credit rating impacted.FCA’s website reads...
Our guidance makes clear to firms that they should ensure that taking a payment holiday will not have a negative impact on your credit file.
MrBarry123 said:
irocfan said:
AIUI it also impacts your credit rating - no problem for an old fart like me with a nearly gone mortgage but for youngsters.....
I don’t believe anyone taking a mortgage holiday agreed with their provider will have their credit rating impacted.FCA’s website reads...
Our guidance makes clear to firms that they should ensure that taking a payment holiday will not have a negative impact on your credit file.
As has been said, I suppose it all depends on your life circumstances:
Age vs Finances available. For me I'm 35, have a young family with nursery fees, a house that needs a lot of work doing on it and have nearly 30 years left of mortgage to pay. I can easily afford an extra £10/month on my mortgage however getting hold of that kind of cash that a 3 month mortgage holiday provides without credit cards and loans would be impossible for me. I anticipate in a few years I'll be in a better position so could pay more off the capital on my mortgage as well.
We're putting the money to one side just in case we need it, however if we've not needed it by the time things return to normal then we'll be using it to replace all the fencing on the house.
Age vs Finances available. For me I'm 35, have a young family with nursery fees, a house that needs a lot of work doing on it and have nearly 30 years left of mortgage to pay. I can easily afford an extra £10/month on my mortgage however getting hold of that kind of cash that a 3 month mortgage holiday provides without credit cards and loans would be impossible for me. I anticipate in a few years I'll be in a better position so could pay more off the capital on my mortgage as well.
We're putting the money to one side just in case we need it, however if we've not needed it by the time things return to normal then we'll be using it to replace all the fencing on the house.
Sarnie said:
I would continue to make your payments, if you can afford to, otherwise you will be worse off.......and don't take the holiday prematurely, you may actually really need it down the line and if they've already given you the three month holiday, they may not help you in the same way again......
You would like to think that given the exceptional circumstances at the moment that if you did need another one in 20 years time, they would still help you out.I am not ashamed to say we took a 3 month MH. We intend to play catchup up once all this is over to get back to "square one" as it were.
Sarnie said:
roadsmash said:
Sarnie, with the above in mind, is a 3 month deferment really that much of a screwing?
For someone with 38 years left on their mortgage and a whopping balance, are they likely to see more of a substantial difference in their monthly payments than someone with, let’s say, 2 years and a few grand left on their mortgage?
What about those on fixed terms? Is it just the fixed term payments that go up? Or is it spread over the whole balance?
Genuinely curious because I can’t see how a 3 month “holiday” can add such a huge amount later down the line. I thought that 3 months amongst the length of (most young people’s) 20+ year mortgages would make the difference in payments negligible?
What am I missing?
If you take the three month payment holiday, then you will be worse off. It's impossible to quantify how worse off every individual would be.For someone with 38 years left on their mortgage and a whopping balance, are they likely to see more of a substantial difference in their monthly payments than someone with, let’s say, 2 years and a few grand left on their mortgage?
What about those on fixed terms? Is it just the fixed term payments that go up? Or is it spread over the whole balance?
Genuinely curious because I can’t see how a 3 month “holiday” can add such a huge amount later down the line. I thought that 3 months amongst the length of (most young people’s) 20+ year mortgages would make the difference in payments negligible?
What am I missing?
My point was that a lot of people think they are getting a "free" payment holiday but you aren't.........and as I said, if you've lost your job or are really struggling, then utilise it for sure.........but if not, then carry on, otherwise you will be worse off.
I wasn’t being argumentative, was genuinely interested. The fact that it’s hard to quantify has answered my question.
Gooose said:
My mortgage and repayment is about £250 a month, I was doing this house up ready to sell. If I take a mortgage holiday to free up £750 for a few more bathroom bits and sell it in the next 12 months (could be unlikely with corona going on) will this affect me much?
Yes, your balance will be higher when you redeem your mortgage to the effect of the three months payments and your payments will increase when your repayments start up again.....Gassing Station | Finance | Top of Page | What's New | My Stuff