Skipping a Mortgage Payment – All You Need To Know
August 29, 2018

In life, you may come across some unexpected cost and you may choose to skip one or two mortgage monthly payments to save you from the situation. For this reason, most private mortgage agreements have a privilege clause for you to skip a mortgage payment. The question is: is it advisable? What cost implications does it have? Our article will show you everything you need to know when it comes to skipping a mortgage payment.

Impact of skipping a payment to the total amount of mortgage paid

Depending on your lender, you may be allowed to skip 1 to 4 monthly payments per year. This means you can skip paying the principal and the interest payment for that month. However, you will not only miss the chance to pay down your balance, but also the interest for the skipped month will be charged and summed with the mortgage balance amount.

Mathematically, skipping a mortgage payment will lead to interest capitalization; where by your interest will be added to your loan balance. This will continually attract more and more interest until the final payment. Make sure you avoid having too much debt. These 10 tips on how to reduce mortgage debt will help you.

You should first consider the extra interest you will have to pay if you opt to skip one or more mortgage payments. Given the effects of skipping a mortgage payment, you take some time to consider the pros and cons and decide what’s best for you to do.

skip mortgage payment

Can I repay my skipped mortgage payment(s)? Is that possible?

Yes, you can decide to repay the skipped payment at any time within the mortgage term and no penalty is applicable in such a case. All the same, you will be required to pay the missed monthly payment and any additional interest charged on the interest portion of the skipped payment to reverse the impact it could have had on the total mortgage amount.

What do I need to qualify for skipping a mortgage payment?

If your mortgage terms and conditions have the ‘skip a payment’ clause, many lenders will have to confirm that:

  • Your mortgage is not in arrears.
  • The mortgage balance and the amount you wish to skip is less than the original mortgage amount.

In most cases, homeowners with a high ratio or 10-year long mortgage terms do not qualify for the skipped mortgage offer. When you’re comparing mortgage rates, one of the factors you need to look into is the terms of conditions of your mortgage. That’s why you should always consider getting a 3-year mortgage term or a 5-year mortgage term.

mortgage payment

Should I skip a mortgage payment? Is it advisable?

In life, you may be faced with a financial crisis, which could be losing your job or any emergencies that bring in unexpected costs. In such a crisis, skipping your mortgage payment will be a short term solution to this challenge. However, you need to consider the extra amount you will pay in interest (on top of your current mortgage rates) over the life of the mortgage; particularly if you will be unable to pay the skipped amount.

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