What is the Grace Period on a Mortgage?

A lot of my clients have asked me what the grace period is on their mortgage. The answer is it depends on your loan agreement. Typically, a borrower has until between the 10-15th of the month to make his mortgage payment without it being considered late. If payment is received after that, it is late and the borrower will likely be charged a late fee.

If the payment is 30 days late, this is the point when the lender notifies the credit agencies. Not only will your wallet be affected by late fees and possible penalties, your credit will also be impacted. A late mortgage payment can drop your credit score up to 110 points. If you have a history of paying 30 or more days late, a lender may notify the credit agencies when the payment is 10-15 days late.

Bottom line, know your agreement with your lender and pay on time, every month. If you don’t know what your grace period is, call your lender and find out.