Life is full of uncertainties. When your financial circumstances change, you might need to make adjustments to your debt repayment arrangements. Mortgage repayments being the largest regular outgoings in many households, it makes sense to tackle it head on as a priority.
Some lenders will require you to have made extra repayments on your loan to be eligible for a repayment holiday; while others may grant it without that additional buffer.
In general, your lender will try to work with you and help you through rough times - since it's also in their best interest for you to get back on your feet, rather than default on your home loan.
Why you might need a repayment holiday
Sometimes you will be able to foresee an upcoming change in your financial situation, for example when taking parental / maternity leave, a career break, change in employment and so on. Whatever the circumstance, if your ability to service your mortgage is expected to change, it's worth speaking to your lender or mortgage broker to see if a repayment holiday might work for you.
Of course there are also unforeseeable circumstances that could impact you financially, such as redundancies, injuries, critical illness or death in the family. While these are stressful times, it's important to try and get your finances in order as early on as possible.
Downsides of a repayment holiday
During the repayment holiday, interest continues to accrue on your home loan. So in the long run you could end up paying more interest on your loan.
Bear in mind that while this can be a handy feature in times of need, it is not going to be a long term solution for serious financial woes.