Mortgage forbearance vs deferment: what each means, how each affects your credit, and when to ask

Mortgage forbearance is a temporary agreement between you and your servicer to pause or reduce your monthly mortgage payments for a defined period — typically 3–12 months. Interest continues to accrue on your balance during forbearance. At the end, you'll owe the paused amounts plus accrued interest. Forbearance does not forgive or eliminate payments; it defers them to a later date via a repayment plan, lump sum, modification, or deferment. The CFPB's forbearance guide covers your rights and what to expect when you request it.

A payment deferral takes the missed payments from forbearance and moves them to the very end of your loan as a non-interest-bearing balloon payment, due when you sell, refinance, or pay off the loan. You resume normal payments as if nothing happened, but your payoff balance is higher by the deferred amount. Fannie Mae and Freddie Mac both offer this option after COVID-era and hardship forbearance. The Fannie Mae hardship assistance page explains the deferral option for conforming loans.

Under the CARES Act and FHFA guidance, COVID-related forbearance was reported as "current" for accounts that were current before the hardship, so it did not damage credit scores. For non-pandemic hardship forbearance, the impact depends on how your servicer reports it. Accounts in agreed forbearance should be reported with a special comment code that prevents the missed payments from being counted as lates. CFPB's credit impact of forbearance guide explains how servicers must report forbearance under FCRA rules.

After forbearance, servicers are required to offer several repayment options: (1) Lump sum — pay everything owed at once (rare for most borrowers); (2) Repayment plan — spread missed payments over 3–12 months added to your regular payment; (3) Loan modification — permanently change your loan terms to lower payments; (4) Payment deferral — move missed amounts to loan end (for qualifying conforming loans); (5) Partial claim (FHA/VA) — a government-backed interest-free second lien for missed amounts. CFPB's avoid foreclosure guide lists all post-forbearance options with servicer contact requirements.

Call your mortgage servicer directly — the number is on your monthly statement. For federally backed loans (FHA, VA, USDA, Fannie Mae, Freddie Mac), you are entitled to request forbearance without providing extensive documentation of hardship. For non-federally backed loans (portfolio loans, private-label securities), servicers set their own policies. Keep records of every call, get confirmation in writing, and follow up with a written request. CFPB's servicer contact guide explains your communication rights and what your servicer must disclose.

Yes. A deferral effectively extends your loan by the deferred number of payments — your maturity date is pushed out. However, the deferred balance is non-interest-bearing (for qualifying conforming loans), so it doesn't compound. If you sell before the original maturity date, the deferred balance is due at closing. If you pay off early, it's part of your payoff quote. Freddie Mac's hardship relief page covers the deferral mechanics for Freddie-owned loans and what the deferred amount looks like on your statement.