What is a repayment holiday?
We all love a holiday, but when it comes to home loans, what is a repayment holiday? Here's everything you need to know.
Please note Unloan does not offer repayment holidays.
A repayment holiday also known as a mortgage holiday or mortgage freeze, is an arrangement with a lender that allows you to temporarily pause your home loan repayments. This can be helpful for those occasions where you may need to direct your cash elsewhere. Some reasons include:
- If your partner is going on parental leave
- If you’re moving from a double to a single-income household for an extended period
- Recovering from a serious injury
Depending on your lender, a repayment holiday typically can last up to six months. However, some lenders may extend it to up to a year, depending on the circumstances of your situation. It’s best to speak to your lender about what specific arrangements could be made.
Considering that a home loan is a long-term commitment, having the option to temporarily pause your repayments could help you turn the tide. However, it’s important to consider that taking a repayment holiday could result in increased repayment amounts after the break ends.
If you're experiencing financial hardship, getting support is important, so, please get in contact with us, we’re here to help.
This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.
