If you’re struggling to pay your mortgage due to redundancy or a period of ill health, thereare options available to help you through the challenging times ahead. One of these optionsis a mortgage payment holiday.This is a short-term agreement with your lender that allows you to temporarily freeze or reduce your monthly mortgage payments for a set period of time until you’re back on your feet.You may remember that mortgage payment holidays were widely advertised to support those who faced financial difficulty in the midst of the COVID-19 pandemic.Lenders took a much more relaxed approach to payment holidays in this instance, given that they were introduced as a government initiative.

Indeed, many individuals who took mortgage payment holidays are yet to be marked down on their credit file as going into arrears in this instance.

However, in non-extenuating circumstances, mortgage payment holidays are treated much more seriously than they were during the pandemic. If you approach a lender today and make them aware that you cannot meet your mortgage payments, this would show up as a late payment on your credit file.

Not all mortgages offer the option of a payment holiday. It’s something you’ll need to check with your lender, as well as in the terms and conditions of your mortgage product.

If it is an option, you’ll need to meet specific criteria in order to be accepted, which often depends on your individual circumstances and previous financial history. For example, lenders may be more inclined to offer you a payment holiday if you have been overpaying your mortgage, and less inclined if you’ve already been in arrears.

Rather than burying your head in the sand, it’s important to seek out advice from either your lender or an adviser if you’re struggling with, or are going to struggle with, meeting your mortgage payments.

In addition to a mortgage holiday, lenders may be able to work with you to put together a payment plan. However, this could also have a longer-term impact on your credit file.

If you are temporarily struggling to pay your mortgage and don’t feel comfortable talking to your lender, speak to an adviser. They will be able to offer guidance on how to broach the subject with your lender, and offer budgeting tips.

While this can be a difficult topic to raise, let alone discuss openly, mortgage advisers are there to talk through your issues in a non-judgemental manner.

In addition, advisers can look at your current deal and see if they’re able to extend your mortgage term and spread out the number of payments. However, be mindful that this will end up costing you more in the long run and may not be a viable option for those who require actual financial support, as interest will also be added to your mortgage debt split across your payment term.

If you are on a standard variable rate mortgage, you may get a better deal by moving on to a fixed rate or tracker.

While it’s easier said than done, the most important thing to remember if you’re struggling to meet your payments is to try not to feel frightened. Mortgage advisers may not be magicians, but by talking it through, they can assess all of the options available to you.

Remember, payment holidays are only a short-term solution and do keep those channels of communication open and stay calm. This too shall pass.

Andrew Milnes is head of the Mortgage Advice Bureau, Bingley, tel: 01274 891312

Advice from our expert on mortgage holidays for those struggling to meet monthly payments