In this article:
During a COVID Mortgage holiday
- Eligibility: To be eligible for the holiday a borrower needs to have suffered COVID caused hardship due to loss or decline in income
- Duration: Lenders are offering a 3-month and 6-month holiday periods. Borrowers can go with either or begin with the 3-month option and then ask for an extension based on financial circumstances at the end of the 3 months.
- Flexibility: If a borrower has applied for a COVID holiday, he/she loses the flexibility to make payments during the holiday period. Repayments can be resumed after the holiday period ends.
- Credit Score: Be sure to apply for a mortgage holiday before discontinuing repayments. A repayment default before opting for the mortgage holiday could severely affect your credit score making it difficult or substantially more expensive to gain access to funds in the future
Get it right from the start with professional help.
After a COVID Mortgage holiday
Other options you could explore
- Interest-only repayment options: A lot of lenders are allowing borrowers to switch to interest-only repayments for a fixed duration. This could help you reduce repayment amounts without increasing the cost of your loan as much as a mortgage holiday.
- Refinancing: If your home loan is over two years old, chances are your rate is not competitive. Compare your mortgage rate to what is the market is offering. Even a small dip in your interest rate could reduce your payment size substantially instantly adding funds to your monthly budget.