How the feature works
Typically, if you've made extra prepayments in the past or your mortgage allows it as a standard feature, you can skip one payment per year without it being reported as missed or late, as long as you notify your lender in advance.
It's not actually free
The skipped payment isn't forgiven, it's added to your outstanding mortgage balance, which means you'll pay interest on it over the rest of your term. Some lenders limit how much you can skip based on prepayments you've already made.
- Skipped amount gets added to your balance
- Usually limited to once per calendar year
- May require prior prepayments to qualify
When it makes sense to use it
This feature works best as an occasional tool for a genuinely tight month, not as a routine budgeting strategy. Using it sparingly keeps the long-term interest cost manageable while giving you flexibility when you actually need it.
Checking if your mortgage includes it
Not every mortgage product includes this feature, particularly no-frills or deep discount mortgages that trade flexibility for a lower rate. Check your mortgage documents or ask your broker before assuming it's available.
Frequently asked questions
- Do I need permission from my lender to skip a payment?
- Yes, most lenders require advance notice so they can process it properly rather than reporting it as a missed payment.
- Does skipping a payment extend my amortization?
- It can slightly extend the time it takes to pay off your mortgage since the skipped amount and its interest get added back into your balance.
- Is this the same as a payment deferral for hardship?
- No, skip-a-payment is a standard feature available to anyone with the option built into their mortgage, while hardship deferrals are arranged case by case.