Some mortgages allow you to take a payment holiday during which your mortgage repayments are suspended.
The request to take a payment holiday must always be made to the bank in advance and in writing.
If you unilaterally take a mortgage payment holiday without the French bank’s prior approval the missing payment will be seen as unauthorised, putting you in default and possibly lead to you being placed on the Banque de France default list.
The life insurance premiums must continue throughout the payment holiday.
The capital outstanding will not change and the outstanding interest will accrue to your mortgage account.
Once the payment holiday is complete your monthly repayments will have to rise.
Why Take One?
Sometimes life becomes temporarily more expensive.
If you are having a pool installed at your French house you might request a payment holiday to leave your Euro funds free to cover the costs of the pool.
If you have to pay for a lavish wedding your cashflow might be quite tight before the big day. A payment holiday would give you some breathing space at a lower cost than taking out another loan.
Remember that any request for a payment holiday has to be approved in advance by the lender.
How Many Can I Take?
Just as in real life, you can’t spend all your time on holiday.
The original loan offer will indicate whether the mortgage terms include the possibility of a payment holiday, the qualification period and the minimum gap between holidays.
You cannot usually take a payment holiday at the start of the mortgage, unless you are waiting on a new-build.
If the bank requires a one or two year gap between each payment holiday the remaining mortgage term limits the total number of potential holidays.
And you have to have a genuine reason to ask for a payment holiday – the swimming pool finance will only work once.
