We understand that the COVID-19 outbreak is taking a toll on families across the country with many parents being out of work or quarantined. As an industry built on homeowners, many of our major lenders have pulled together to provide you beneficial options during this time and help alleviate some of the financial stress.
Depending on your lender, there may be options available to you during this time such as:
- Deferral of payments
- Re-amortization of the loan
- Capitalization of outstanding interest & costs
- Special payment arrangements
Please Note: that when you defer payment for (6) months, in most cases, the lender will take the interest that would have been paid compounded and add it to your monthly mortgage balance. Upon maturity of your mortgage term, the payments will be calculated moving forward based on the higher mortgage balance.
THE BIG BANKS
Big banks including Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada have opted to provide coordinated relief for their customers.
These banks will be working with personal and small business clients to cope with the economic fallout of the virus. Effective immediately, all six are introducing mortgage payment deferrals of up to six (6) months and are also offering relief on other credit products for those families who are facing hardship during this situation.
A mortgage payment deferral means that customers are not required to make regular payments (principal, interest and property tax, if applicable) on their mortgage for up to six months. During the time mortgage payments are deferred, it is important for customers to understand that interest will continue to accrue and will be added to the mortgage account balance at the end of the deferral period.
These banks are experiencing a much higher volume of calls than normal, so it may take time to get through. To help mitigate this, Scotiabank introduced an online application for mortgage deferrals, which you can find here. They have also introduced the ability to defer mortgage payments associated with up to four properties, including primary and rental/secondary homes.
We are monitoring if any of the other big banks do the same.
In addition to mortgage insurers and big banks, credit unions are also working diligently to provide some relief for customers amid the COVID-19 pandemic.
Clients of Desjardins that are having touble repaying their loans can reach out to discuss their options. The financial cooperative is reviewing each request on a case-by-case basis and will suggest solutions to help, which may include payment relief for all financing products (no negative impact on credit rating).
Coast Capital has noted possible deferral of mortgage payments and the opportunity for relief on other credit products on a case-by-case basis.
Similar to the other credit unions, VanCity is working to offer relief on a case-by-case basis and has noted for individuals to contact them to discuss the options available. In other efforts to help, VanCity is working to provide emergency working capital, is buying back foreign currency at the original sol drate for those customers impacted by travel and they are waiving INTERAC e-Transfer® and ATM fees in Canada until April 30.
Last but not least are monoline lenders, which are also doing their part to assist households with their financial struggles during this difficult time. Similar to credit unions, all financial assistance will be done on a case-by-case basis so it is best to contact your mortgage professional or lender directly.
Here are some important statements from these lenders regarding COVID-19:
- B2B Bank: COVID-19 - We stand prepared and ready to help
- CMLS: COVID-19 Update
- Equitable Bank: COVID-19 - we're here to help
- First National: Keeping you informed: COVID-19
- Haventree Bank: COVID-19: We are here for you when your world turns upside down
- Home Trust: Statement from Home Trust on COVID-19
- HomeEquity: HomeEquity Bank Communication - COVID-19
- Manulife Bank: A message regarding Novel Coronavirus (COVID-19)
- MCAP: COVID-19 Update: Skip-A-Payment / Hold-A-Payment Programs
- Motusbank: A message from Bill, our CEO. We're with you through the COVID-19 Virus
- Peoples Group: What we're doing during coronavirus disease (COVID-19)
- Simplii Financial: We're here to help with whatever you need
- Tangerine: Tangerine Bank here to help our Clients impacted by COVID-19 with new financial relief program
In addition to the big banks, mortgage insurers including CMHC, Genworth & Canada Guaranty are working to help homeowners who have been financially impacted by the COVID-19 outbreak. Starting now, they have increased their flexibility and are allowing payment deferral of up to 6 months for home-owners who, primarily but not exclusively, purchased with less than 20% down.
Genworth Canada released a statement on March 16, 2020 outlining their Homeowner Assistance Program (HOAP), which is designed to assist Genworth Canada-insured homeowners who experience sudden financial setbacks that could temporarily impact their ability to meet their mortgage obligations. Borrowers who qualify under the lender's internal guidelines and Genworth's Homeowner Assistance Program will receive up to six (6) months of relief allowing borrowers some time to recover and focus on what's important.
Canadian Mortgage and Housing Corporation (CMHC)
Canadian Mortgage and Housing Corporation (CMHC) is offering tools that can assist homeowners who may be experiencing financial difficulty. Their default management tools include: payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses and special payment arrangements.
CMHC also provides mortgage professionals with tools and the flexibility to make timely decisions when working with you to find a solution to your unique financial situation, including:
- Converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur.
- Offering a temporary short-term payment deferral. Your mortgage professional may be prepared to offer greater payment flexibilities, particularly if previous lump sum prepayments have been made, or if you have previously chosen an accelerated payment schedule.
- Extending the original repayment period (amortization) in order to lower your monthly mortgage payments.
- Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period.
- Offering a special payment arrangement unique to your particular financial situation.
In addition to Genworth Canada and CMHC, Canada Guaranty is also doing their part to support homeowners during this difficult time. Per their statement released on March 16, 2020 they noted with their Homeownership Solutions Program, lenders currently have the ability to capitalize up to four (4) monthly mortgage payments.
However, to assist eligible homeowners as they navigate through these challenging circumstances, Canada Guaranty is prepared to extend this program option to allow the capitalization of up to a maximum of six (6) monthly payments. This is assuming the original insured loan amount is not exceeded, request for capitalization is received before September 13, 2020 and that the lender confirms the capitalization is being applied reasonably to help mitigate short-term financial difficulty resulting from COVID-19.
LENDER CONTACT INFORMATION
During this time, it is best to discuss your mortgage with your mortgage broker or lender should you have any financial concerns surrounding the COVID-19 outbreak. Please be advised, there may be longer than normal wait times for calls during this situation and to expect at least 20-30 minutes for a representative. Be sure to have your mortgage number available to ensure smoother service and remember to be kind!
Here are some direct contact numbers for various lenders across the country:
|Bank of Montreal||1-877-895-3278|
|First Calgary Financial||403-736-4000|
|RFA||1-866-939-5005||Mortgage Numbers Starting with 4|
|RFA||1-877-776-6888||Mortgage Numbers Starting with 6|
|RFA||1-833-228-5697||Mortgage Numbers Starting with 7, 8 or 9|
|Street Capital||See RFA|