Alexander Hall: Use mortgage holidays properly

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Alexander Hall: Use mortgage holidays properly

Mortgage holidays should not be used for people struggling financially, but can be constructive for other purposes, mortgage advisory company Alexander Hall has said.

Spokesperson Andy Pratt said mortgage holidays - by which a homeowner can skip payments for a fixed period - should be used in "the context of (someone's) overall financial position", stressing that they are not intended to help get through hard times and those in such situations should discuss it with their lenders.

But he said that it is often an option for self-employed people during slow trade periods or parents looking after children during the summer holidays.

Some clients use it as a "seasonal activity", for example if they take a holiday in January or February, then overpay in other, busier months.

Mr Pratt said mortgage holidays do not affect a borrower's credit rating as long as it is within the terms of the mortgage contract.

Last month, the Times reported an increase in people taking mortgage holidays.

It said that switching to an interest-only deal on a 25-year, £150,000 mortgage at 5.5 per cent would slash repayments by almost £250 and extending the mortgage by five years would cut costs by about £70 a month.
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