Making mortgage repayments will seem like even more of a chore as Christmas approaches but your lender won't share in the season of goodwill unless you make arrangements (and can afford) to take a payment holiday.
"A lot of people don't know they can do it," says Mr Peter Bastable, managing director of brokers Simply Mortgages. "Lenders don't write to customers and say 'by the way, Christmas is in three months, would you like to take a payment holiday?' "
But they are available at some lenders. Permanent TSB, for example, has a "Skip Months" repayment option, which allows mortgage customers to forget about their mortgage commitments for one or two months. On a mortgage of €200,000 over a 25-year term, repayments at the current 4.7 per cent standard variable rate are €1,134.49. With two months off every year, this rises to €1,361.66.
Customers can also build up overpayments in order to take a payment holiday, which might save on the total amount of interest the customer will pay. Otherwise, the deferred interest will be added back on to the loan at the end of the payment holiday period and the repayment will be increased so that the loan is repaid within the remaining term.
Applying for a payment holiday on a once-off basis might be more appealing and more affordable than constantly paying higher monthly repayments, and rules for these types of payment holidays will vary according the lender.
At ICS Building Society, borrowers can defer repayments for three consecutive months, up to four times during the life of the mortgage. The option is open only with repayment mortgages after three years of repayments and one month's notice must be given to avail of the mortgage break.
It may also be possible at some financial institutions to spread annual repayments on personal loans over 10 or 11 months of the year and avoid repayments in months when there's an extra pull on pockets.
Consumers should always check the consequences that taking a break will have on the total amount that they repay.
Overworking your credit card can also have consequences. It's easy to lose track of how much has been paid for by credit card and experience the shock of the monthly statement. Never mind that each time the shop assistant runs the magnetic strip through the little card machine located next to the till it becomes more and more difficult to pay off the bill before punitive rates of interest take effect.
Applying for a credit card with a low introductory rate on purchases around this time of year can give consumers a little more breathing space during the post-Christmas months, however.
Bank of Ireland's recently introduced Advantage series offers an APR of 0 per cent on new purchases for the first six months of use. Timing is everything for product launches: the pre-Christmas season is one of three key times in the year when sales of credit cards are most prevalent, according to Mr Eddie Ryan, head of card marketing at Bank of Ireland.
"I think people find that Christmas is always more expensive than you budget for," says Mr Ryan. Credit card usage rises by about 20 per cent, he estimates. "We would certainly see a huge jump in November - it's more of a six-week Christmas than just the month of December. That's when we would have customers requesting an increase in facilities," he says.
After six months, the Advantage Card reverts to 17.8 per cent APR on purchases, at which point cutting the card in half is always an option. If you haven't repaid the bill by this time, switching to a card with a low rate of interest on balance transfers might provide temporary shelter from high interest.
For example, balance transfers at Ulster Bank are currently 1.5 per cent APR, while MBNA and AIB both have a 1.9 per cent rate on balances. These last for up to six months on the new card. Any debts the cardholder has accrued can be paid off at this lower rate, although further purchases will be subject to the standard rate.
