To determine the cost of the skipped payment, we must determine the difference in total paid throughout the 25-year mortgage amortization period
$514,151 (total mortgage)
- $512,115 (total mortgage w/ skipped payment)
= Additional costs from skipping: $2,036
By skipping one monthly payment in 25 years, you would pay an additional $2,036.
Can I repay my skipped payment(s)?
If you skip a payment, you can repay it at any time during your current mortgage term without penalty. However, to fully reverse the effects you must pay back the monthly payment as well as all additional interest accrued on the interest portion of the missed payment.
Skipped payment qualification requirements
So long as it’s a privilege written into your mortgage’s terms and conditions, in order to skip a payment, most lenders simply require that:
- Your mortgage not be in arrears (meaning you’ve missed 1 or more of your mortgage payments), and
- The current mortgage balance + the payment amount you wish to skip cannot exceed the original amount of your mortgage.
It’s rare for skipped payment privileges to be offered to homeowners with high-ratio mortgages. It should also be noted that skipped payments are not commonly offered with 10-year mortgage terms.
Is skipping a payment a good idea?
If you lose your job or are facing any financial crisis, skipping a mortgage payment can offer you and your budget some temporary relief. However, you should be conscious of how much more you could potentially pay in interest charges over the life of your mortgage, especially if you choose not to repay your skipped amount. If you’ve spent the time before this financial crisis making extra payments with the goal of paying it off sooner, skipping a payment could erase most of your efforts.
Tip : Rather than skipping a payment, you could consider refinancing your mortgage instead, to access equity, or to get a lower mortgage rate and a smaller mortgage payment. Click here to talk to a broker about your options.
