Mortgage forbearance vs. deferment: Key differences

Forbearance and deferment are two relief options your mortgage servicer may offer If you're struggling to make your mortgage payments. Forbearance temporarily pauses or reduces your monthly payments while you work through a financial hardship, and deferment moves the payments you missed to a later date, often at loan maturity, sale, refinance, or payoff. Neither option erases what you owe, and your servicer may use the two together, starting with forbearance and moving into deferment once you're able to resume regular payments.

Key takeaways:

• Forbearance pauses or reduces your payments while you're actively working through a hardship, while deferment moves your missed payments to be repaid later.
• Forbearance fits an ongoing hardship when you can't afford your regular payment, while deferment fits once your hardship has resolved and you're ready to resume payments but need to catch up on what you missed.
• Your servicer may use forbearance and deferment together, and eligibility, interest treatment, and repayment terms vary by loan type and servicer.
• Forbearance and deferment both affect your credit unless they’re due to special circumstances, like a natural disaster.

Mortgage forbearance vs. deferment at a glance

Here's a direct comparison before we get into the details of how each option works.

What is mortgage forbearance?

Mortgage forbearance is when your mortgage servicing company arranges for you to pause your mortgage payments or make smaller ones temporarily. You still owe the full amount, and you typically pay back the difference later.

Forbearance can help if your home was damaged in a natural disaster, you are waiting on funds from Social Security or disability, or you lost your job.

How mortgage forbearance works

Once your forbearance ends, your servicer will work with you to repay the amount unpaid, you will likely have one of these general repayment structures:

• Reinstatement. Paused payments, repaid in a lump sum
• Deferment or partial claim. Paused payments, repaid at the end of the mortgage
• Modification. Paused payments, repaid over the life of the modified mortgage. With modifications, your rate and term can change.
• Repayment. Paused payments, repaid over a short-term period to bring your loan current without changing the rate or term.

Mortgage forbearance requirements

There isn't a single, universal set of forbearance requirements. See what your servicer can qualify you for as soon as you know you're facing a hardship.

Some servicers require you to request forbearance or hardship assistance within a specific window after a disaster or other qualifying event.

If you have a government-backed loan, program-specific rules may also apply. For example, VA loan forbearance follows guidelines set for VA loans, so it's worth asking your servicer how your loan type affects your options.

Repayment options after forbearance

When your forbearance period ends, your servicer will work with you to pay the missed or reduced payments. Depending on your situation, that could mean a lump-sum payment, a short-term repayment plan that adds a portion of the past-due amount to your regular payment, a deferment, or a loan modification.

What is mortgage deferment?

Mortgage deferment, sometimes called a payment deferral, moves past-due payments to later in your loan term. This avoids the need for a lump sum payment. It's commonly used after a forbearance period ends, once you're able to resume your regular payment but can't repay the missed amount right away.

How mortgage deferment works

For conventional loans backed by Fannie Mae, how much a servicer can defer is determined by the investor of the loan. To qualify, you generally need to have resolved your hardship, be able to resume your full monthly payment, and be unable to reinstate the loan or afford a repayment plan to catch up.

On an FHA-insured loan, the comparable option is a Standalone Partial Claim, which places your past-due amount into an interest-free subordinate lien. That lien isn't due until you make your last mortgage payment, sell the home, transfer the title, or refinance, whichever happens first.

How deferment affects your loan term and interest

Deferment's effect on your loan depends on the program.

Under Fannie Mae's standard payment deferral, the deferred amount becomes a noninterest-bearing balance due at your loan's existing maturity date, or earlier if you sell, transfer, refinance, or pay off the mortgage. All other terms of your mortgage, including your maturity date, are meant to stay the same.

An FHA Standalone Partial Claim works a bit differently. Instead of changing your first mortgage, it creates a separate, interest-free lien that sits behind your primary loan and comes due at payoff, sale, assumption, or title transfer. In both cases, your regular monthly payment amount typically goes back to what it was before your hardship, but you're carrying an added balance until one of those trigger events happens.

How to qualify for mortgage deferment

Qualification depends on your servicer and who owns or guarantees your loan, but common factors include:

• Whether you've resolved the underlying financial hardship
• Whether you can resume your full, regular monthly payment
• How many payments you've missed, and how long your loan has been outstanding
• Whether reinstatement or a repayment plan is a realistic option for your budget, instead

Key differences between mortgage forbearance and deferment

Forbearance and deferment solve different problems: one buys you time during a hardship, and the other helps you catch up once the hardship has passed. Here's how they compare on the details that matter most.

Duration of relief

Forbearance runs for a period that your servicer sets based on your hardship and can sometimes be extended if you need more time. Deferment is generally a one-time event applied to a block of past-due payments.

Repayment timing

With forbearance, repayment can start as soon as the plan ends, whether that's a lump sum, a temporary bump in your payment, or a rollover into a deferment or modification. With deferment, repayment is pushed out to your loan's maturity date or to whenever you sell, refinance, or pay off the mortgage, so there's no immediate repayment obligation.

Interest and fees

Forbearance repayment paths can continue accruing interest on the paused or reduced amounts until you repay them, depending on which option your servicer offers. Deferment amounts under Fannie Mae's payment deferral are structured as a non-interest-bearing balance, meaning the deferred principal and interest doesn't accrue additional interest once it's deferred.

Loan-term impact

Forbearance by itself doesn't change your loan term. Deferment adds an outstanding balance that's due later, but under a standard Fannie Mae payment deferral, your note's maturity date and other terms stay the same, since the deferred amount is due at that existing maturity date or sooner.

An FHA Standalone Partial Claim instead creates a separate lien alongside your mortgage rather than altering your original loan term.

How to request mortgage relief

If you’re having financial problems that will affect your ability to pay your mortgage, follow these steps to get help.

Contact your mortgage servicer

Call your servicer as soon as you know you're facing a hardship and explain your situation. Ask what mortgage relief options are available to you specifically, since forbearance and deferment availability can depend on your servicer, your loan type, and how far behind you are.

Gather financial documentation

Your servicer may ask for current income and expense information to evaluate you for relief, and some programs require a trial payment plan before final approval. Having recent pay stubs, bank statements, or documentation of your hardship ready can speed up the process.

Get the agreement in writing

Before you agree to any plan, make sure you understand the amount due, how interest will accrue, and exactly when and how you'll repay it, and get the terms of your forbearance agreement in writing. That written record protects you if there's ever a dispute about what was agreed to.

Does forbearance or deferment hurt your credit?

Lenders are required to make accurate reports to credit bureaus. If you make late payments, it will be reported and affect your credit.

It’s important to contact your lender before you miss mortgage payments.

Forbearance or deferment can damage your credit, so avoiding these options is the optimal path.

A mortgage default is a more serious problem that will damage your credit. If you fall behind without an approved plan in place, those missed payments are typically reported as delinquent.

Understanding the difference between forbearance and foreclosure can help you see just how much relief options like these can help you avoid the more serious consequences of missed payments.

Alternatives to mortgage forbearance and deferment

Forbearance and deferment are two of several loss mitigation options your servicer may offer. If neither fits your situation, ask about these alternatives.

Reinstatement

A mortgage reinstatement brings your loan current by paying the full past-due amount at once. It's often required to stop an active foreclosure and doesn't add a deferred balance or an extended repayment period.

Repayment plan

A repayment plan lets you gradually catch up by adding a portion of your past-due balance to your regular monthly payment over a short period, so your payment is temporarily higher until you're caught up. Most repayment plans occur over 2 to 4 months up to 6 months in rare cases.

Loan modification

A loan modification permanently changes one or more terms of your mortgage. On FHA loans, for example, a modification can resolve past-due payments by adding them to your principal balance and extending your loan term at a fixed rate.

FAQ

Here are answers to common questions about forbearance vs. deferment.

Is it better to get a deferment or forbearance?

It depends on where you are in your hardship. Forbearance fits an ongoing hardship when you can't currently afford your payment. Deferment fits once your hardship has resolved, and you can resume your regular payment, but you need help catching up on what you missed. Your servicer can help you determine which applies to your situation.

Is mortgage forbearance a bad idea?

Not inherently, but it's a tool with trade-offs rather than free relief. You still owe the full amount, and repayment can mean a lump sum or a temporarily higher payment. Mortgage forbearance can be a good idea in the right circumstances.

What qualifies you for mortgage forbearance?

A financial hardship, such as a job loss, a major medical expense, or damage from a natural disaster, along with your servicer's approval. Requirements and documentation vary by servicer and loan type, so contact your servicer directly to find out what applies to you.

Can you defer a mortgage payment for 1 month?

Under Fannie Mae's standard payment deferral option, a deferral must cover at least 2 months of past-due payments, so a standalone, one-month deferral generally isn't available through that program. If you only need to catch up on a single missed payment, ask your servicer about a repayment plan instead.

How many times can you defer a mortgage payment?

While you may be able to defer payments on your loans more than one time for the life of the loan, it gets progressively more difficult to qualify for loss mitigation each time you do so.

The bottom line: Understanding mortgage forbearance vs. deferment

Deferment and forbearance are two of several options your servicer may offer. Forbearance pauses or reduces your mortgage payments while you work through a hardship. Deferment moves what you missed to be repaid later, often at your loan's maturity, sale, refinance, or payoff. Neither option forgives the debt, and your servicer may use them together depending on your situation.

If you're a Rocket Mortgage client, you can reach out by signing in to your Rocket Account, locating the Mortgage tab, and selecting Help > Payment Assistance. You can also review ways to get help with your mortgage for more information.