Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

How to apply for a mortgage holiday

Oct 19, 2010

We are really struggling to pay our mortgage. How do we go about getting a "mortgage holiday" from our bank?

Trudi, Adelaide

It is a rarely known fact but most banks and credit unions offer a "mortgage holiday" in most of their home loan products.  Basically it where you can put your loan repayments on hold for a period of time, sometimes up to one year.  

Some banks may call their "mortgage holidays" by another name such as "parental leave" or "repayment pause options" … but regardless of the name, they are essentially the same in nature

Check with your bank first as the rules for these mortgage holidays do vary from bank to bank and some are stricter than others.   Generally you need to be ahead in your repayment schedule to be eligible for a mortgage holiday and be a customer of the bank for a few years. 

Whilst some banks do not require any repayments at all, some require a reduced payment during a mortgage holiday.  Each application is on a case-by-case and bank-by-bank basis.  Banks will not allow for you to re-draw on your loan during the period of your "holiday".

I suggest that you phone your bank first Trudi to confirm they offer this option on your loan type and that they can put a pause on your repayments for a year.   Make sure that you confirm with the bank that there is no additional cost and the interest rate should not change, subject to any future interest rate rises.    There is a chance that additional mortgage insurance may be required.

Unfortunately getting a holiday on your mortgage doesn't mean that the bank will freeze the interest as well ... it would be nice if they did!  Please be aware that your loan will still accrue at the normal interest rate and subject to interest rate rises.  Your loan balance will rise as a result.

Whilst you can take advantage of the repayment free period in full, I recommend making some payments to minimise the impact of the interest continuing to accrue on your loan.

Once you return from your mortgage holiday, expect to pay a slightly higher amount as repayments are recalculated for the revised balance of the loan.

DISCLAIMER : Advice is general in nature. Readers should always seek further financial advice before making financial decisions.

Tags: FamilyFinancial PlanningProperty

Author: Mr Taxman

Comments

"Getting a legitimate loan have always been a huge problem To so many clients who have financial needs. The issue of bad credit and collateral are something that clients are always worried about when seeking a loan from a legitimate lender. TEAM LEADER CREDIT FIRM.has made that difference in the lending industry. TEAM LEADER CREDIT FIRM has been accredited by the lending organization council to give out loans to local and international clients at 3% interest rate . We have been given the privilege to meet your financial needs. The issue of credit shouldn’t stop you from getting the loan that you need. Our Services Include the Following:- *Investors Loans *Debt Consolidation *Second Mortgage *Business Loans *Personal Loans *International Loans No social security and no credit check, 100% Guarantee. All you have to do is let us know exactly what you want and we will surely make your dream come true. LEADER CREDIT FIRM says YES when your banks say NO. Lastly, we fund small scale loan firm, intermediaries, small scale financial institutions for we have unlimited capital. For further details to go about procuring a loan from us: Kindly respond immediately to this email: teamleaderloancompany24@gmail.com Company Name: TEAM LEADER CREDIT FIRM Company Email: teamleaderloancompany24@gmail.com Company NMLS ID: 315276. Motto:Investing For Generations."

By: team leader on Jul 03, 2018 10:23AM

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "I NEED MY EX BACK DESPERATELY EMAIL DR. SAM FOR URGENT AND FAST HELP: SUPREMESPELLCAST@YAHOO.COM HI AM Jennifer Cross Sidwell!! from Australia. with this great tears of joy and happiness in my..."

    By: jennifer cross at Dec 10, 2018 12:01AM

    Post: Marriage

  • "HOW I GOT MY EX HUSBAND BACK WITH THE HELP OF DR PETER THE REAL ONLINE SPELL CASTER WHATSAPP/CALL +1(321)754-0649 My name is LINDA ROBERT from United State, I want to quickly tell the world that..."

    By: LInda Robert at Dec 09, 2018 8:31AM

    Post: Marriage

  • "HOW I GOT MY EX HUSBAND BACK WITH THE HELP OF DR PETER THE REAL ONLINE SPELL CASTER WHATSAPP/CALL +1(321)754-0649 My name is LINDA ROBERT from United State, I want to quickly tell the world that..."

    By: LInda Robert at Dec 09, 2018 8:31AM

    Post: Marriage

  • "HOW I GOT MY EX HUSBAND BACK WITH THE HELP OF DR PETER THE REAL ONLINE SPELL CASTER WHATSAPP/CALL +1(321)754-0649 My name is LINDA ROBERT from United State, I want to quickly tell the world that..."

    By: LInda Robert at Dec 09, 2018 8:30AM

    Post: Marriage

  • "My Husband divorce me for no reason, Thanks to Dr.FREEDOM for bringing back my husband,and brought great joy to my family once again, My name is Alberto Stephanie. i live in US, I`m happily married..."

    By: Margaret wyne at Dec 08, 2018 9:28PM

    Post: Marriage