For most military families, the mortgage is the single largest monthly expense—and the single largest opportunity for SCRA savings.

The Servicemembers Civil Relief Act provides powerful protections for your home loan, including interest rate caps, foreclosure protection, and the ability to recover overpaid interest.

The 6% Interest Rate Cap on Mortgages

If you took out your mortgage before entering active duty, your interest rate can be reduced to 6% for the duration of your military service.

How This Works

  • The rate cap applies to mortgages originated before your active duty date
  • It includes both principal and interest portions of your payment
  • The lender must forgive the excess interest—not defer it
  • Your monthly payment will decrease accordingly

The Savings Are Substantial

Example: $300,000 mortgage at 7.5% = $2,098/month

With SCRA 6% cap: $1,799/month

Monthly savings: $299

Annual savings: $3,588

Over a 4-year enlistment, that's over $14,000 in savings—money that stays in your pocket.

Foreclosure Protection

The SCRA provides robust protection against foreclosure:

During Military Service

  • Lenders cannot foreclose without a court order
  • Courts must stay proceedings if your service affects ability to pay
  • No sale, foreclosure, or seizure of property during service

After Military Service

  • Protection extends for 12 months after service ends
  • Courts can extend this protection if your ability to pay is still affected
  • Even after protection ends, many states have additional protections

What This Means Practically

If you fall behind on mortgage payments while on active duty, your lender cannot simply foreclose. They must:

  1. Obtain a court order
  2. Prove to the court that military service doesn't affect your ability to pay
  3. Give you opportunity to defend or request a stay

This gives you time to work out payment arrangements, request forbearance, or resolve the situation.

Getting Retroactive Refunds

If your lender has been charging you more than 6% since you went on active duty, you're entitled to a refund.

The process:

  1. Calculate the excess interest paid (amount above 6%)
  2. Request the refund in writing from your servicer
  3. Provide your military orders as proof
  4. The refund should be applied to principal or returned to you

We've seen service members receive mortgage refunds of $5,000 to $20,000 for years of overpaid interest.

How to Apply for SCRA Mortgage Benefits

Step 1: Gather Documentation

  • Copy of your military orders showing active duty date
  • Recent mortgage statement
  • Loan origination documents (to verify pre-service date)

Step 2: Contact Your Servicer

  • Call the customer service number on your statement
  • Ask to speak with their military/SCRA department
  • Request the SCRA interest rate reduction in writing

Step 3: Follow Up in Writing

Send a formal written request via certified mail including:

  • Your name and loan number
  • Request for 6% rate cap under SCRA (cite 50 U.S.C. § 3937)
  • Copy of military orders
  • Request for retroactive refund of excess interest

Step 4: Verify and Monitor

  • Confirm receipt of your request
  • Verify rate change on next statement
  • Check that any refund was properly applied

Common Servicer Tactics (And How to Counter Them)

Some mortgage servicers make this harder than it needs to be:

"We need your orders to show 90+ days"
The law doesn't require this. The rate cap applies from day one of active duty.

"The rate cap only applies going forward"
Wrong. You're entitled to retroactive refunds from your active duty start date.

"We'll defer the interest, not forgive it"
The SCRA requires forgiveness, not deferral. The excess interest must be eliminated.

"This loan doesn't qualify"
If the loan originated before active duty, it qualifies. Period.

VA Loans and SCRA

Yes, VA loans are also covered by SCRA. Even though VA loans typically have competitive rates, if your rate is above 6%, you can still request the cap.

What About Refinancing?

Be careful: if you refinance while on active duty, the new loan may not qualify for SCRA protection since it originated during service, not before.

Consider whether the refinance rate is better than 6% before proceeding.

Protect Your Home

Your home is likely your most valuable asset and your family's stability. The SCRA gives you powerful tools to protect it while you serve.

Don't let these benefits go unclaimed. The law is designed to help you—use it.