How to Pause or Reduce Your Mortgage Payment
What deferment means and when lenders allow it
Mortgage deferment means your lender agrees to let you skip or reduce your monthly payment for a set period — usually three to twelve months — without marking you as late. The unpaid amount gets added to the end of your loan, so you pay it back later rather than now. This is different from forbearance, which is a temporary pause that may or may not add the missed payments to your balance.
Lenders do not offer deferment automatically. You have to ask, and approval depends on your loan type, your lender's policies, and your reason for needing the pause. Conventional loans (sold to Fannie Mae or Freddie Mac) have different deferment rules than FHA loans, VA loans, or USDA loans. Some lenders will defer payment if you have a documented hardship — job loss, medical emergency, natural disaster — while others defer only in specific circumstances written into your loan agreement.
The key difference between deferment and forbearance: deferment adds missed payments to your loan balance automatically, while forbearance may require you to repay the missed amount in a lump sum later or add it to your loan. Ask your lender which option they are offering before you agree.
Key Takeaways
- Deferment pauses your payment for a set time and adds what you owe to the end of your loan, so you pay it back over time rather than in one lump sum.
- Your loan type — conventional, FHA, VA, or USDA — determines what deferment options exist and who you contact to request one.
- You must contact your lender directly to request deferment; they will ask for proof of hardship and may require documents like a job termination letter or medical bills.
- Deferment does not hurt your credit score the way a missed payment does, but it does extend your loan and increase the total interest you pay.
- If your lender denies deferment, forbearance or a loan modification may still be available as alternatives.
How to request deferment from your lender
Start by calling the customer service number on your mortgage statement or the back of your payment coupon. Tell them you want to discuss deferment options. Do not wait until you have already missed a payment — call as soon as you know you will have trouble making the next one. Lenders are more likely to work with you before you fall behind.
Have these documents ready when you call: your loan number, a recent mortgage statement, and proof of the hardship (a termination letter from your employer, a medical bill, an insurance denial, or a notice from your landlord if you are renting and lost income). The lender will tell you whether deferment is available for your loan type and what the terms are.
If the first person you speak to says no, ask to speak with the loss mitigation department or a loan servicer specialist. Some customer service representatives are not trained on deferment options and may give an incorrect answer. Get the name of anyone you speak with and the date and time of the call, in case you need to follow up.
Deferment rules for conventional, FHA, VA, and USDA loans
Conventional loans sold to Fannie Mae or Freddie Mac have a COVID-19 payment deferment option that was created during the pandemic and remains available. Under this program, you can defer up to twelve months of payments if you have a documented financial hardship. The deferred amount is added to your loan balance, and you resume regular payments after the deferment period ends. Approval is not may provide; your lender will review your situation.
FHA loans allow deferment under the Loss Mitigation program if you are in financial hardship. You can defer up to twelve months of payments, and the amount is added to your loan. Some FHA servicers also offer a partial payment plan, where you pay a reduced amount during the hardship period instead of deferring the full payment.
VA loans (for military members and veterans) have a dedicated deferment program. You can defer up to twelve months of payments if you have a temporary hardship. The VA does not charge interest on the deferred amount, which is an advantage over conventional loans. Contact your VA loan servicer to request deferment.
USDA loans (for rural homebuyers) allow deferment for up to twelve months under the Loss Mitigation program. Like FHA loans, USDA servicers may also offer a partial payment plan as an alternative. The deferred amount is added to your loan balance.
What happens to your credit and your loan balance during deferment
Deferment does not appear as a late payment on your credit report if your lender reports it correctly. Your credit score should not drop because of deferment itself. However, if you miss a payment before the deferment is approved, that missed payment will show on your credit report and will hurt your score. This is why calling your lender before you miss a payment matters.
Your loan balance grows during deferment because the unpaid payments are added to what you owe. If you defer $1,500 per month for six months, you add $9,000 to your loan balance. You will pay interest on that $9,000 for the remaining life of your loan, which means deferment costs you money in the long run. However, if the alternative is missing payments and facing foreclosure, deferment is usually the better choice.
After the deferment period ends, your regular monthly payment resumes. Some lenders offer a repayment plan where you pay a slightly higher amount each month for a set period to catch up on the deferred payments faster, rather than adding them all to the end of the loan. Ask your lender whether this option is available.
Alternatives if your lender denies deferment
Forbearance is the most common alternative. Under forbearance, your lender agrees to accept a reduced payment or no payment for a set period (usually three to six months). Unlike deferment, forbearance does not automatically add the missed payments to your loan balance. Instead, you and your lender agree on a repayment plan after the forbearance period ends — you might pay a lump sum, add the amount to your loan, or resume regular payments and pay extra each month.
Loan modification is a permanent change to your loan terms. Your lender may lower your interest rate, extend your loan term, or add unpaid amounts to your balance to reduce your monthly payment. Modification is harder to get than deferment or forbearance, but it can lower your payment permanently if you are in long-term hardship.
If you are behind on payments already, ask your lender about a repayment plan. This lets you catch up by paying extra each month over a set period, usually six to twelve months. You keep making your regular payment plus an additional amount toward the arrears.
How deferment affects the total cost of your loan
Deferment extends your loan because you are not paying down the principal during the deferment period. If you have a 30-year mortgage and defer for six months, you are essentially adding six months to the life of the loan. You will pay more interest overall, though the exact amount depends on your interest rate and how much you defer.
Example: If you defer $1,500 per month for six months on a loan with a 4% interest rate, you add $9,000 to your balance. Over the remaining life of your loan, that $9,000 will accrue interest. The total extra cost depends on how many years remain on your loan, but it will be several hundred dollars or more.
Despite this cost, deferment is usually cheaper than the alternatives: a foreclosure will destroy your credit for seven years and cost you your home, while missed payments will trigger late fees, higher interest rates, and legal action. If deferment is the difference between keeping your home and losing it, the extra interest is worth paying.
Frequently Asked Questions
Can I defer my mortgage payment if I am already late?
Yes, but it is harder. If you are already thirty days or more behind, your lender may still work with you, but they will likely require a more detailed hardship explanation and may require you to catch up part of the arrears before deferment begins. Call your lender immediately if you are late; waiting makes the situation worse.
What counts as a hardship for deferment?
Job loss, reduced income, medical emergency, death in the family, natural disaster, and divorce are common reasons lenders accept. Some lenders are flexible about what counts as hardship; others have a strict list. Your lender will tell you whether your situation qualifies when you call.
How long does deferment approval take?
Most lenders take two to four weeks to review your request and send you a deferment agreement. Some move faster if you provide all required documents upfront. Ask your lender for a timeline when you apply, and follow up if you do not hear back within the timeframe they give.
Do I have to pay back the deferred amount all at once?
No. In most cases, the deferred amount is added to your loan balance and you pay it back over the remaining life of your loan as part of your regular monthly payment. Some lenders offer a repayment plan where you pay extra each month for a set period to catch up faster, but you can usually choose to add it to the loan instead.
Will deferment show up on my credit report?
Deferment itself does not show on your credit report if your lender reports it correctly. However, if you missed a payment before deferment was approved, that missed payment will appear on your report. This is why calling before you miss a payment is important.