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A skip-a-payment privilege is an optional feature on some Canadian mortgages that lets a borrower skip one scheduled payment in a year, usually once conditions are met (such as being ahead on prepayments). The skipped amount is not forgiven — it is added back onto the outstanding balance and extends the effective payoff.
It is deferred, not free. The lender still adds the missed principal and interest to the mortgage balance, so interest keeps accruing on a slightly larger amount going forward. The privilege is meant for genuine cash-flow flexibility — a bonus month, a slow season for self-employed income — not as a routine way to reduce payments.
It is different from a payment deferral arranged for financial hardship, which a lender may grant outside the normal skip-a-payment feature and which can have its own conditions. It is also unrelated to prepayment privileges, which work in the opposite direction by paying the mortgage down faster.
Lender-specific feature: not every Canadian mortgage includes a skip-a-payment option — it is a lender feature and often tied to using prepayment room first.
Balance grows: the skipped payment’s principal and interest are added to the outstanding balance, which can extend the amortization slightly if not offset elsewhere.
Not for insured-mortgage relief: borrowers facing genuine hardship should ask about formal relief options rather than relying on a single skip; repeated missed payments can affect standing and credit reporting.
Check before relying on it: eligibility rules (how far ahead on the mortgage a borrower must be, how many skips per term) vary by lender and are set out in the mortgage documents.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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