It’s Holiday Season… But Is Now The Right Time To Take A Break On Your Mortgage?

With the cost of living crisis still biting – finding any spare funds to enjoy a summer holiday will be challenging for many this year.

For some, taking a break on their mortgage repayments is a tempting option to free up cash and to release money for things you want to enjoy.

Leading property and mortgage expert Sam Fox, from UKMC, said anyone considering such a move needs to think long and hard before making the leap.

He said: “Mortgage holidays, also called a mortgage payment holiday, are a financial arrangement where your lender allows you to pause or reduce your monthly mortgage payments for a short, agreed period.”

“Interest still accrues during this time, and you’ll need to repay what’s been deferred either through higher future payments or an extended term.”

“It can be really tempting to go down this road, especially if you have already paid off a large chunk of your mortgage.

“Some lenders may only permit you to take a mortgage payment holiday if you’ve pre-built up overpayments to match what you would have paid.

“But it’s worth remembering, like a summer holiday, the break won’t last forever, and you will eventually have to pay it back. So, I always encourage people to think long and hard and ask themselves if it is really the most sensible step.”

Pros of taking a mortgage holiday

• Short‑term financial breathing space – It can relieve pressure and help absorb temporary income dips due to maternity leave or job change, for example.

• Greater flexibility with finances – Frees up cash for other urgent expenses.

• Ease of access – Available if you’ve built some equity or can show a short-term income drop. Lenders typically offer it quickly and without affordability checks.

Cons of taking a mortgage holiday

• Interest still accrues – During the holiday, interest continues to build on your outstanding balance.

• Higher repayments later – At the end of the break, your mortgage balance will be larger, and future payments (or term) will increase.

• Credit file impact – Even though it’s a lender-approved break, a payment holiday may be recorded on your credit file and could affect future borrowing.

• Not suitable for long-term issues – If your income drop is permanent, a holiday can hurt more by increasing long-term costs.

For more free advice visit www.ukmc.co.uk