- Functioning and interests of the deferral of monthly payments
- Consequences of the deferral of monthly payments on the duration and the cost of the mortgage
Under the terms of its mortgage agreement, and more specifically its particular conditions, it is possible to suspend one or more of its monthly payments. How many deadlines can be affected? How to proceed? DuitDesign tells you the main principles of the suspension of monthly payments of the mortgage.
Functioning and interests of the deferral of monthly payments
The suspension of monthly payments is a solution offered by the banks, which allows, as part of a mortgage, postpone one to several repayment dates in time; however, their number is limited and specified in the contract.
The postponement can be carried out for an isolated monthly payment or for several at a time, respecting a certain delay between the different requests. To do this, the borrower must request his bank in writing at least 15 days before the next withdrawal.
In addition, the bank will give its consent only after a certain time after the beginning of the repayment of the credit (generally two years). Moreover, in contrast to the borrowed capital and the corresponding interest, the monthly amount of the loan insurance remains due to the originally scheduled deadlines.
Consequences of the deferral of monthly payments on the duration and the cost of the mortgage
If the suspension of monthly payments represents a safety valve for borrowers, allowing them to cope in the event of exceptional financial difficulties In the short term, however, it has two important consequences.
It entails indeed a extension of the loan periodat least equal to the number of maturities reported; in addition, the banks set a maximum duration that can not, more often than 24 months, exceed that initially stipulated in the contract.
Also, it involves an increase in the cost of credit, the borrower being liable for the insurance corresponding to the months of extension of the loan but also the related interest; depending on their amount, additional monthly payments, and still within the limit of 24 additional months, may be necessary.
In all cases, any suspension of monthly payments is reported in a new amortization table that cancels and replaces the previous one sent to the borrower.