Hey everyone,
Can anyone explain mortgage deferral to me? From what I understand, you can not pay the mortgage for 6 months. Only the interest will be added to your mortgage total, raising your payments afterwards.
However, Scotia has given an example at https://www.scotiabank.com/ca/en/pe...s/scotia-support/mortgage-payment-relief.html
But when I calculate the total amount of both payments, it seems even the additional interest payments in the end are actually less? Making the mortgage deferral a no brainer.
For example.
Their example shows a 15-year mortgage.
15 x 12 months = 180 payments. Regular mortgage is $1,379. This x 180 = $248,220
After a deferral of 6 months, it would be:
14.5 years = 174 payments. New mortgage payment is $1,438. This x 174 = $250, 212
Difference over the 15 years is only $1,992
But the interest saved up-front is $2,981.40
How does this make sense? Wouldn't you pay more in the long run?
What did I do wrong?
Can anyone explain mortgage deferral to me? From what I understand, you can not pay the mortgage for 6 months. Only the interest will be added to your mortgage total, raising your payments afterwards.
However, Scotia has given an example at https://www.scotiabank.com/ca/en/pe...s/scotia-support/mortgage-payment-relief.html
But when I calculate the total amount of both payments, it seems even the additional interest payments in the end are actually less? Making the mortgage deferral a no brainer.
For example.
Their example shows a 15-year mortgage.
15 x 12 months = 180 payments. Regular mortgage is $1,379. This x 180 = $248,220
After a deferral of 6 months, it would be:
14.5 years = 174 payments. New mortgage payment is $1,438. This x 174 = $250, 212
Difference over the 15 years is only $1,992
But the interest saved up-front is $2,981.40
How does this make sense? Wouldn't you pay more in the long run?
What did I do wrong?