During the deferral period, interest will continue to accumulate and you’ll pay more interest over the life of your loan or mortgage than originally anticipated. Once you resume making your loan payments, the accumulated interest will be paid first. Mortgages with full payment deferrals may not see a principal reduction for several months until the interest is caught up. Payment increases may be required to keep within the original amortization period. It’s important to know that by choosing a payment deferral, it may take you longer to pay-off your loan than originally contracted. The longer the deferral period chosen, the higher your total interest cost will be, but you will not pay interest on interest.
To keep your repayment on track we encourage you to pay back your deferred payments as soon as you can financially afford to do so.