April 12, 2020 at 15:05 #150684
I’ve been offered a payment holiday by Halifax for my mortgage. I’m self-employed and my wife manages a care home. As a key worker, she is still going out to work every day. In fact she’s working more hours than before so from a financial point of view we’ve not taken a hit there.
As I’m self-employed, I’m self isolating (so I don’t catch COVID-19 and accidentally pass it to her and those she cares for). My work has slowed down in some areas but increased in others. As a journalist I write for a few hospitality publications and have taken on extra commissions because of the virus and it’s effect on that industry. Although I think that throughout April I’m likely to earn less than I did in March and previous months, but I’m not sure it’s worth taking Halifax up on their offer.
We’re still likely to be able to pay our mortgage and other bills. But my question is; should we take the offer anyway? The offer is a 3 month payment holiday which means we’d be £600 better off a month for three months. This sounds great, but the interest will still accrue and after that 3 month period our payments will likely be recalculated to include the three unpaid ones. Making them higher.
Now extending our mortgage by 3 months doesn’t worry us. We’ll be remortgaging anyway soon enough to build an extension. We’re also now better off financially then we were when we took out the mortgage, so as far as changes and renegotiation go we’re not worried. But it’s the increased interest that concerns us. We understand this question pretty much boils down to what your fixed rate of interest is, but in your opinion, should we take the payment holiday if we’re not struggling yet as a precaution? Or should we hold our nerve and just tighten our belts a little?
SamApril 13, 2020 at 09:53 #150700HannahParticipant
This is a good question and I’d be interested to know what the advice is as taking the payment holiday now to guarantee you’ll be safe is tempting.April 13, 2020 at 11:05 #150706
I think I’m just keen to know is it worth bothering with if we can still pay our bills. If it doesn’t put my payments up by much then we might as well take it. But if it’s going to be significant, and we don’t really need it I’ll steer clear.
I’ve also asked Halifax, but have had no answer. I should call them but I’d rather not wait on hold when the issue isn’t pressing.April 13, 2020 at 13:53 #150718Annie ThorpeKeymaster
Our suggestion at MoneyMagpie is ALWAYS pay the bills you can afford to pay. The accrued interest might not amount to all that much in the grand scheme of things – but you’re still paying extra for something you didn’t need to fork out for. Even if it’s a couple of hundred quid extra – that’s a few hundred quid you could’ve stuck in a stocks and shares ISA and tripled instead.
If things change and you find your work dries up or your wife is unable to work, that’s the time to speak to your mortgage provider about a holiday.April 15, 2020 at 15:59 #150793JasmineKeymaster
Yes, I agree. If you have the cash, keep paying the bills regularly. One argument, of course, for putting it off is to keep cash aside in case you lose your job once we’re out of lockdown (that’s going to happen for some people sadly – just look at Oasis and Warehouse). But on the whole it’s better to pay each month than have bills building up to something more expensive, and possibly unaffordable, later on.April 16, 2020 at 14:08 #150802KieraParticipant
Can anyone get a payment holiday if they need one or do you have to be on furlough or something to prove you have less money? Or if I take a holiday now because I’m on a lower income than usual, will that affect my credit?April 18, 2020 at 18:24 #150847
Thanks Annie and Jasmine, in that case I’ll hold on for now and pay them as normal.
Kiera – I think you need to be offered one by someone you’ve got credit with. I received an email from my mortgage provider (Halifax) and from the company I have my car on finance with. They came to me, no payments were missed and it is totally optional. Neither myself or my wife have been furloughed, in fact we’re both still rather busy workwise.April 20, 2020 at 18:19 #150900AnthonyParticipant
I think it depends by how much the payments will increase but on the whole I’d say take it. It’s usually going to make you more financially secure with money in the bank if it is needed for something than tied up in a mortgage.
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