Mortgage Break Calculator
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Reviewed by Calculator Editorial Team
Taking a break from your mortgage payments can save you money on interest, but it comes with costs. Our mortgage break calculator helps you determine the total cost of taking a break from your mortgage payments, including the interest you'll pay during the break and the additional interest you'll pay when you resume payments.
How to Use This Calculator
To use the mortgage break calculator, follow these steps:
- Enter your current mortgage balance in the "Current Mortgage Balance" field.
- Enter your current mortgage interest rate in the "Current Interest Rate" field.
- Enter the length of your mortgage break in the "Break Duration" field.
- Select the frequency of your mortgage payments from the "Payment Frequency" dropdown.
- Click the "Calculate" button to see the results.
The calculator will display the total interest paid during the break and the total interest paid after the break, as well as the total cost of the break.
Formula Used
The mortgage break calculator uses the following formulas to calculate the interest paid during the break and after the break:
Interest Paid During Break
Interest Paid During Break = (Current Mortgage Balance × Current Interest Rate × Break Duration) / 12
Interest Paid After Break
Interest Paid After Break = (Current Mortgage Balance × Current Interest Rate × Remaining Term) / 12
Total Cost of Break
Total Cost of Break = Interest Paid During Break + Interest Paid After Break
Where:
- Current Mortgage Balance is the current balance of your mortgage.
- Current Interest Rate is the current interest rate on your mortgage.
- Break Duration is the length of your mortgage break in months.
- Remaining Term is the remaining term of your mortgage in months after the break.
Worked Example
Let's say you have a mortgage balance of $200,000, an interest rate of 4%, and you're taking a 6-month break. Your mortgage term is 30 years, so the remaining term after the break is 354 months.
Interest Paid During Break
(200,000 × 0.04 × 6) / 12 = $4,000
Interest Paid After Break
(200,000 × 0.04 × 354) / 12 = $28,320
Total Cost of Break
$4,000 + $28,320 = $32,320
In this example, taking a 6-month break on a $200,000 mortgage at 4% interest would cost you an additional $32,320 in interest over the life of the mortgage.
Interpreting Results
The results from the mortgage break calculator show you the cost of taking a break from your mortgage payments. The "Interest Paid During Break" shows how much interest you'll pay while you're not making payments, and the "Interest Paid After Break" shows how much interest you'll pay after you resume payments. The "Total Cost of Break" shows the total additional interest you'll pay as a result of taking the break.
If the total cost of the break is higher than the value you expect to gain from the break, it may not be worth taking. However, if the value you expect to gain is higher than the cost of the break, it may be worth considering.
Considerations
When interpreting the results, consider the following:
- The cost of the break is based on the current interest rate and mortgage balance. If either of these changes, the cost of the break may also change.
- The cost of the break is based on the assumption that you will resume payments at the same frequency as before the break. If you change the frequency of your payments, the cost of the break may also change.
- The cost of the break does not include any fees or penalties associated with taking a break from your mortgage.
Frequently Asked Questions
Can I take a break from my mortgage payments?
Yes, you can take a break from your mortgage payments, but it's important to understand the costs and implications. Our mortgage break calculator can help you determine the total cost of taking a break from your mortgage payments.
How long can I take a break from my mortgage payments?
The length of your mortgage break will depend on your lender and the terms of your mortgage. Some lenders may allow breaks of up to 12 months, while others may have different policies. It's important to check with your lender before taking a break from your mortgage payments.
Will taking a break from my mortgage payments hurt my credit score?
Taking a break from your mortgage payments may not hurt your credit score, but it's important to understand that missing payments can have negative consequences. If you're unable to make your mortgage payments during a break, it's important to contact your lender as soon as possible to discuss your options.
Can I refinance my mortgage after taking a break?
Yes, you can refinance your mortgage after taking a break, but it's important to understand the costs and implications. Refinancing may allow you to secure a lower interest rate, but it may also come with fees and closing costs. It's important to shop around and compare offers before refinancing your mortgage.
What should I do if I can't afford to make my mortgage payments during a break?
If you're unable to make your mortgage payments during a break, it's important to contact your lender as soon as possible to discuss your options. Your lender may be able to offer a payment plan, deferment, or other solutions to help you get back on track. It's important to act quickly to avoid missing payments and damaging your credit score.