How do I take a mortgage payment holiday and will it affect my credit rating?

5 min Read Published: 16 Jun 2020

Coronavirus update on mortgage payment holidays

If you are struggling financially due to the coronavirus pandemic, you have the option of taking a mortgage payment holiday. In March 2020 the government announced homeowners could apply for a payment holiday lasting up to 3 months without it affecting their credit rating. This was extended in June 2020, allowing borrowers to start a new mortgage payment holiday for 3 months or extend their existing holiday by a further 3 months. On 31 October, the government extended the scheme again, allowing new applicants up to a 6-month payment holiday or those who have previously taken a 3-month break to extend it by a further 3 months. People who have already had a 6-month mortgage payment holiday are not eligible for further payment holidays. 

Contact your lender if you need to apply for a mortgage payment holiday and access their fast track approval process to get a quick decision. Any unpaid interest will need to be paid back over time and individual credit ratings should not be affected. Lenders should also be able to offer other forms of support if you are not eligible for the scheme.

What is a mortgage payment holiday?

How do I take a mortgage payment holiday and will it affect my credit rating?A mortgage payment holiday is an arrangement that you may be able to make with your lender allowing for a temporary reduction or stopping of your monthly mortgage repayments. This arrangement will depend on your circumstances and payment history and the length of a payment holiday allowed will vary between lenders but could be up to 6 months. Not all lenders allow mortgage payment holidays and so it often will depend on the product terms and conditions set out by the lender.

Who is eligible for a mortgage payment holiday?

Every lender will have different eligibility rules but in general terms the following criteria will apply:

  • you will need to have previously overpaid your mortgage and built up sufficient credit to take a break from payments
  • if you are temporarily struggling to meet your monthly mortgage payments due to a change of circumstances, such as redundancy
  • if you are currently in arrears with your mortgage payments you generally are disqualified from being granted a mortgage payment holiday

What are the pros and cons of taking a mortgage payment holiday?


  • A mortgage holiday can relieve some financial pressure in the short term
  • If you have a temporary drop in income or then arranging a mortgage holiday can be a sensible move


  • If you arrange a mortgage holiday the interest on your mortgage will still be charged and therefore your mortgage balance will increase
  • Once the mortgage holiday is over then you need to arrange with your lender whether you can extend your mortgage term or increase monthly payments to pay off the increased loan
  • If your lender agrees to a mortgage holiday your credit file may be affected which in turn may affect your ability to get a mortgage in the future

How do I arrange a mortgage payment holiday?

  • check the terms of your mortgage to see if they allow for a mortgage payment holiday
  • if you have only recently arranged your mortgage then there may be a minimum period before you are eligible for a mortgage payment holiday
  • check with your lender to see if your personal circumstances qualify you for a mortgage payment holiday

Alternatives to a mortgage payment holiday

Arranging a mortgage payment holiday should really be your last resort as the fact that you have made this arrangement could affect your credit rating and your chances of getting future credit.

Firstly, I would suggest you review all your outgoings to see if you can save some money in that area. Our article - Start ‘big picture’ budgeting will give you a step by step process to follow. Alternatively, consider using a budgeting app to help categorise your spending and identify wasteful subscriptions. Check out our article 'Best budgeting apps in the UK - how to budget without trying'.