One area you need to carefully consider and understand before proceeding is how the lender will treat the missed mortgage payments. Make sure you talk to us regarding interest rate availability prior to proceeding as adding the missed payments to your mortgage or “capitalising the payments” may result in you adding more than necessary to your balance. This results in an increased mortgage balance and increased monthly payments when the payment holiday ends.
£200,000 mortgage at 75% Loan to Value over a 25 year term on 4.24% Standard Variable Rate (SVR) and Fees Free Retention Rate for 2 Years Fixed Rate at 2.72%.
Payment on 4.24% is £1,068.97 pm
Payment on 2.72% is £919.55 pm
This equates to £149.42 pm, or £448.26 over the 3 month holiday period, extra added to your outstanding mortgage balance if you remain on Standard Variable Rate (SVR), resulting in a payment increase of £2.42 pm or an additional £726 over the mortgage term that could be avoided. If you would like to speak to an adviser regarding this or any other matter or concern please complete our Request Call Back form and an adviser will call you back to discuss your requirements.