Mortgage payment breaks

In certain circumstances you may be able to take a break from making your mortgage repayments if you have an unexpected drop in income, you are in danger of going into arrears or you have additional expenses.

When your repayments start again they will be for a higher amount as your lender will add the postponed payments to your overall mortgage balance and keep the term the same.

Depending on your lender, repayment history and the terms and conditions of your individual mortgage agreement some of the mortgage payment break options may be:

• Take a payment break for a specific amount of time i.e. three or six months. No payments of any type will be made during this time
• Skip specific payments in a given year so you can plan to have no mortgage payments during periods when outgoings are high such as Christmas or the summer holidays. In this case your repayments are spread out over 10 months rather than 12
• Pay interest only for a certain period such as six months. During this period no money will be paid off the capital part of the mortgage but it will reduce your monthly outgoings as you will only be paying the interest portion of your regular repayment
• If you have previously overpaid your mortgage and built up ‘credit’ you can use it to take a payment break and underpay your mortgage, usually by the amount built up

If you take a mortgage payment break it needs to be agreed with your lender in advance. Your lender will need to agree when it will start, the duration and any other conditions.  A missed payment that you haven’t agreed in advance, even an accidental one, can negatively affect your credit history.

Stopping or reducing your repayments now will result in them increasing at a later date. Take a look at our budgeting tips to see if there are other areas where you can make savings.

A payment break is also called a temporary deferral of payment, payment holiday or moratorium.