Everything You Need to Know About Mortgage Payment Holidays in the UK

Last Updated: 10 October 2025

A mortgage payment holiday is an agreement with your lender that allows you to pause or reduce your monthly payments for a set period, usually between one and six months. Many homeowners ask “Can I take a mortgage holiday in the UK?” when they face short-term financial pressure, such as job changes, illness, or unexpected expenses. While this option provides breathing space, it is not without consequences.

During a payment holiday, interest continues to build, which means your overall mortgage balance will increase. Once the holiday ends, your monthly payments may rise slightly, or your mortgage term may be extended to make up the difference. For this reason, payment holidays are considered a short-term solution rather than a long-term fix.

Eligibility varies between lenders, but most will look at your payment history, current circumstances, and ability to resume payments after the break. It is important to apply formally through your lender rather than simply stopping payments, as missed payments without agreement will harm your credit record.

For many borrowers, a mortgage holiday can provide welcome relief, but weighing up the pros and cons is essential. Speaking with a broker helps ensure you fully understand the impact before deciding.

What is a Mortgage Payment Holiday?

A mortgage payment holiday allows homeowners to temporarily stop their monthly mortgage repayments for a set period. This option is particularly beneficial for those experiencing financial strain due to circumstances such as job loss, illness, or increased living costs.

In the UK, mortgage payment holidays gained significant traction during the COVID-19 pandemic. According to reports, nearly 2 million homeowners took advantage of these options during the crisis to avoid defaults and maintain homeownership.

How Do Mortgage Payment Holidays Work in the UK?

Typically, mortgage payment holidays in the UK last from three to six months. However, some lenders may extend this period based on individual cases. During this time, homeowners do not need to pay their monthly mortgage dues. It is crucial to note that the interest on the outstanding mortgage balance continues to accumulate during the holiday.

For example, if your monthly mortgage payment is £1,200, and you take a three-month holiday, you would still owe interest on the total amount during that period. After the holiday ends, you may find yourself facing higher monthly payments if those missed payments are added to your mortgage balance or a longer repayment term.

Who Is Eligible for a Mortgage Payment Holiday?

While eligibility criteria for mortgage payment holidays vary between lenders, borrowers generally must prove they are experiencing financial difficulties. Common qualifying circumstances include:

• Job Loss: If you lost your job or have faced a significant income reduction.

• Health Issues: A serious illness or disability that affects your ability to earn an income.

• Increased Living Costs: Sudden spikes in essential expenses, such as utility bills or childcare costs.

  
  

Most lenders require documentation proving your financial hardship. This could include recent payslips, bank statements, or official letters detailing your situation. It's essential to reach out to your lender for specific eligibility requirements.

Pros and Cons of a Mortgage Payment Holiday

Advantages

1. Immediate Financial Relief: Pausing mortgage payments allows homeowners to redirect funds toward essential expenses, such as food and utilities, during tough times.

   
   

2. Prevention of Repossession: A payment holiday can help you avoid falling behind on your mortgage, which might lead to foreclosure.

   
   

3. Flexible Options: Many lenders offer varied terms for payment holidays, allowing borrowers to select the duration that best fits their current financial needs.

   
   

Disadvantages

1. Debt Increase: Since interest accumulates during the freeze, borrowers could face a larger overall debt once the holiday concludes, potentially leading to more significant monthly repayments.

   
   

2. Possible Credit Impact: Although taking a payment holiday doesn't directly affect your credit score, the resulting higher debt burden or any subsequent missed payments could negatively impact your financial history.

   
   

3. Complicated Availability: Not all lenders provide this option, and the criteria for eligibility can differ, making it crucial to confirm details with your lender.

   
   

How to Apply for a Mortgage Payment Holiday

The application process for a mortgage payment holiday is relatively straightforward, but speed is essential. Here's how to proceed:

1. Contact Your Lender: As soon as you recognise you might need a payment holiday, get in touch with your lender. Most institutions have special teams to assist with these requests.

   
   

2. Gather Documentation: Be ready to submit evidence of your financial situation, such as income statements or bank records that reflect your circumstances.

   
   

3. Understand Terms: Before agreeing to a payment holiday, clarify the terms with your lender. Know how interest will be calculated and what your payment obligations will be post-holiday.

   
   

4. Officially Submit Your Request: Once you have gathered the necessary information, submit your application. Your lender will review it and communicate their decision to you.

   
   

Step-by-Step Mortgage Journey: Taking a Payment Holiday

Step 1 – Assess Your Situation

Identify why you need a payment holiday, whether it’s job loss, illness, or rising costs. Consider if the issue is temporary.

Step 2 – Speak to Your Broker or Lender Early

The earlier you act, the more options you have. Contact your broker or lender before missing any payments.

Step 3 – Gather Your Documentation

Prepare evidence of financial hardship, such as payslips, bank statements, or employer letters.

Step 4 – Review the Terms Carefully

Understand how the holiday will affect your repayments and overall mortgage balance. Ask questions before committing.

Step 5 – Submit the Application

Complete the lender’s application, either online or directly with their support team. Provide all requested documents to avoid delays.

Step 6 – Manage the Holiday Period

Use the breathing space wisely. Reallocate funds to essentials, and start planning for the return to normal payments.

Step 7 – Prepare for the End of the Holiday

Expect higher payments or an extended term. Revisit your budget and, if needed, discuss alternatives such as remortgaging or product transfers.

What Happens After the Holiday Ends?

After your mortgage payment holiday concludes, you will need to revert to your regular payment schedule. Consider these important aspects:

• Adjustments to Payments: Depending on your lender's policy, missed payments may be added to your outstanding mortgage balance, resulting in increased monthly payments or an extended repayment duration.

  
  

• Stay in Contact: Maintain communication with your lender regarding any continued financial challenges you might be facing. Many lenders are open to discussing alternative repayment options.

  
  

• Budget Reevaluation: Post-holiday, take time to reassess your budget. Ensure that your financial plan accommodates your mortgage payments along with other daily expenses.

  
  

Is a Mortgage Payment Holiday the Right Option for You?

Deciding whether to utilise a mortgage payment holiday requires careful consideration of your financial situation. Reflect on these factors:

• Your Current Financial State: If you are experiencing temporary difficulties and expect your financial condition to improve soon, a mortgage holiday could offer the relief you need.

  
  

• Long-Term Effects: Assess how a payment holiday may impact your finances in the long run, including your overall debt and stability.

  
  

• Explore Alternatives: Consider other options, like negotiating a temporary reduction in payments or consulting a financial advisor for assistance, before committing to a payment holiday.

  
  

Final Thoughts

Mortgage payment holidays can be a valuable resource for homeowners facing financial difficulties. However, understanding the potential impacts on your long-term financial health is essential before making a decision. By weighing your options and maintaining open communication with your lender, you can make informed choices that best suit your financial needs.

As you navigate your financial circumstances, consider reaching out for professional guidance. Whether choosing a mortgage payment holiday or exploring other routes, being informed and proactive will help safeguard your financial future.

FAQs

1. Does taking a mortgage payment holiday affect my credit score?

Not directly, as agreed payment holidays are not recorded as missed payments. However, your overall debt will increase, and if you struggle to keep up after the holiday, your credit profile could be impacted.

2. Can I take more than one mortgage payment holiday?

This depends on your lender’s policy and your circumstances. Some may allow multiple holidays, while others restrict it to one within a set timeframe.

3. How quickly can I apply for a mortgage payment holiday?

Most lenders will review applications within days, but preparation matters. Having your financial documents ready will speed up the process.

4. Are all types of mortgages eligible for payment holidays?

Not always. Some buy-to-let, interest-only, or specialist mortgages may have stricter criteria. Always confirm with your lender or broker first.

5. Can I make partial payments during a holiday?

Yes, some lenders allow reduced payments instead of a full holiday. This can ease pressure while limiting interest build-up.

6. Will I need to reapply for a mortgage after the holiday?

No, your existing mortgage continues. You simply return to payments once the agreed period ends, possibly on adjusted terms.

7. What alternatives exist if I do not qualify?

Alternatives may include extending your term, switching to interest-only temporarily, or negotiating a reduced payment plan. A broker can help explore these options.

Written by Ben Stephenson, CeMAP‑qualified Mortgage Broker, and reviewed by Mortgage Experts.

Manor Mortgages is FCA authorised (496907), has business for nearly 30 years and is highly positively reviewed (4.9 rated on Google). We have helped thousands successfully secure the right mortgage. Bristol based mortgage brokers, but can assist nationwide.