Martin Lewis has put out a stark warning to those thinking about applying for a mortgage payment holiday while in lockdown.
It comes as thousands of people across the UK may have lost their jobs or been furloughed because of the coronavirus pandemic.
Speaking on Monday’s This Morning to Holly Willoughby and Phillip Schofield the money expert told viewers ‘if you don’t need it, don’t do it’.
Martin told hosts that if you choose to take out a payment holiday it could have a detrimental effect on getting a mortgage in the future.
‘This is something you should do if you need it, and you should not do if you don’t need it. This is not something just to take willy-nilly,’ he began.
‘Here’s why you need to be careful, this is a mortgage payment holiday, not an interest holiday, so you don’t pay the mortgage but the interest keeps growing while you are on this payment holiday.’
Martin went on to give an example of how taking a break from your mortgage could affect your future monthly payments.
He continued: ‘So to give you an example if you have 20 years left on your mortgage and you’re paying £700 a month and you took a six month mortgage holiday, that’s three months and three months, then at the end, you would have 19 years six months left to pay, so it would cost you £725 a month so each of your payments would go up by £25 quid.
‘But the less time you have left and the higher the interest, that could see payments go up by £50, £75 or £100 a month so that’s the first reason to be very careful.’
He added: ‘The second is, while these won’t go on your credit file, mortgage companies will be looking to see if you have taken a payment holiday, they can’t do it by looking at your credit file but they can see it by using things called open banking or payment history.