Sharon McDougall - Updated - 5th February 2024 - 2 minutes to read
When you take a mortgage holiday it means you’re deferring the payments until a later date. Under the current conditions, you can apply for a payment break on your mortgage for up to six months.
Your lender will explain how the missed repayments can be made – this might be by increasing monthly payments for a fixed period, for example, or adding the total sum missed to the end of your mortgage.
If your remaining mortgage term is lengthy, the additional amounts may have less impact on your monthly repayment when you begin making payments again; however, taking a mortgage holiday will still cost you more in interest over the life of the loan.
Should the remaining time of your mortgage be shorter, however, your new monthly repayments could be significantly higher following the mortgage holiday as there will be less time available to repay the missed payments.
Also bear in mind that interest on the missed payments continues to accrue during a mortgage holiday. Sometimes lenders also offer the ability to pay only capital or interest payments for a period, to relieve the financial pressure on customers.
Get a rough indication of what your monthly repayments might be under each of our different debt solutions.
Is it worth applying for a mortgage payment break?
In some cases a mortgage holiday will be essential to prevent the loss of a home. It offers valuable support when finances are so affected that perhaps bankruptcy is the only end result, or the damaging effects of debt on a homeowner’s mental/physical health are too much.
If you can meet your mortgage repayments, however, it’s advisable to do so even if other creditors such as credit card or store card companies are given a lower priority. Scotland offers various debt remedies where unsecured debts have become unmanageable.
Deferring payments does have implications for your financial stability in later months as you need to make them at some point, so in the long run it may not make sense to take a mortgage holiday.
If you’re unsure whether to apply for a mortgage holiday, it’s advisable to seek professional debt help – perhaps from a debt charity or licensed insolvency practitioners (IPs). Scotland Debt Solutions offers free same-day meetings and can quickly assess your best options.
In reality, a mortgage holiday only defers payments for up to six months - it’s intended to provide temporary breathing space for homeowners in severe financial difficulty rather than be a long-term solution to serious debt problems. It will always cost more in the long run, but in some cases is vital to prevent repossession whilst easing immediate financial pressures.
Formal debt solutions available in Scotland, such as the Debt Arrangement Scheme (DAS) or Scottish Trust Deed, could help you to restructure your other debts, thereby freeing up money to keep up with your monthly mortgage repayments.
For more information on whether a mortgage holiday may be worth it for you in the long-term, please call our team of licensed insolvency practitioners. Scotland Debt Solutions specialises in helping Scottish residents deal with debt, and can provide the reliable guidance you need.
Borrowing money when you’re already deeply in debt requires careful consideration, and consultation with your trustee, as there are various factors associated with further borrowing in this situatio...
If you’re about to be discharged from a Trust Deed, you may be wondering to what extent your ability to obtain a mortgage has been affected.
If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work...
Why Choose Us
Speak Direct With
A Qualified Adviser
We Don't Operate
5 Offices in Scotland
Ask us About
Fully Regulated Advisors
From a Reputable Firm
Helping Scots Get
Out of Debt Since 1989
We'll give you a call
Our Scottish based team can help advise you on your debt problems.
Our personalised debt report will help you better understand your financial position and see where your money is going.
Arrange a call with an expert advisor at a time to suit you or contact our team via WhatsApp for immediate help and advice.
We can help you with...
Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debtsFind out More
A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.Find out More
A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.Find out More
Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority
Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.