A mortgage moratorium is an agreement or legal act by which the borrower is granted a deferral or temporary suspension of their mortgage repayments, usually in situations of financial difficulty. It is formalised before a notary to give it legal validity and certainty.
What is it for?
- It allows mortgage repayments to be suspended or deferred for a set period
- It gives the borrower financial breathing space at times of crisis or hardship
- It prevents defaults that could lead to repossession (foreclosure)
- It formalises a legally binding agreement between the borrower and the lender
What does the notary do?
- Receives the request and the documents needed to formalise the moratorium
- Drafts the document or notarial record (acta) containing the moratorium agreement
- Verifies the identity and capacity of the parties involved
- Attests to it with public authority, and signs and seals the document to guarantee its validity
Main features
- It has a fixed term for the suspension or deferral
- It may involve adjustments to the amount or the repayment periods
- It is a voluntary agreement between borrower and lender
- It must be in writing and formalised before a notary for greater security
Important considerations
- It is advisable to review the terms carefully before signing
- It may involve additional interest or a change to the repayment schedule
- The period and conditions of the moratorium must be clearly set out
- It is a mechanism to avoid repossession and facilitate restructuring
Legal value
A mortgage moratorium formalised before a notary is a public document with full legal validity, which protects both parties and provides certainty about the terms of the deferral.