The period of lack of a mortgage is a period during which the possibility of paying a reduced monthly fee is granted. During this time only interest is paid or the total payment of the installments is postponed. This grace period could be granted by the bank in situations in which, to be able to face the future payments of the mortgage, it would be convenient to reduce or postpone the installments temporarily. A grace period must be requested from the bank, which will study each personal situation.
The grace period can range from several months to over 5 years, depending on the conditions of the mortgage loan contracted and what our bank offers us. In the case of being able to pay only the monthly interest, the fee could be reduced by approximately 50%, depending on each case- PAYDAY NOW.
The mortgage market is very broad and it is difficult to establish standards in terms of the conditions of shortages: some banks can offer only a few months of grace, others more than 5 years or, directly, not give this option to the client.
How much does a mortgage shortage cost?
To better explain how a mortgage deficiency works, we can use the following example : mortgage loan of € 120,000 at 20 years, with an interest rate of Euribor +1.25% (APR variable of 2%) and a monthly payment of 564.65 € If we request a partial deficiency period of 24 months from our bank, we would pay € 123.70 per month, which means a reduction in our quota of almost 79%. After this loan period with a deficiency, the remaining monthly installments will be € 619.98 – provided that the interest rate does not change – 9% more than the original installment before the grace period.
Requesting a grace period for our mortgage loan makes the final price of the mortgage more expensive. Although it is true that during the grace period the monthly payment is reduced considerably when returning to the original conditions of the mortgage a monthly amount must be paid higher than what was originally had. That is, as during the grace period only the interest on the mortgage loan was amortized when returning to normal conditions, more interest is paid as the outstanding capital is higher than it would have been with a normal amortization, without deficiency.
In addition, when requesting a mortgage deficiency period, a novation of the same must be made, that is, to redefine the terms in which the mortgage is granted. This entails a commission in most banks that usually ranges from 1% of the outstanding capital going forward, always with a minimum amount that depends on the bank.
Who can opt for a mortgage grace period
If our bank contemplates the option of mortgage deficiency, there are a series of conditions that must be fulfilled to qualify for it, among which are the economic situation of the holders of the loan.
In this way, the most important thing when considering applying for a mortgage deficiency period is to consult with our bank that will inform us of the terms and conditions of the same. It should not be forgotten that it is a timely relief resource for the family economy that has its advantages and disadvantages.