FIND AN EXPERT
Let us connect you with
the right broker for you.

Contact Us

FIND AN EXPERT
Drop your contact info below, and we'll be in touch. 

Contact Us

Big Banks Announce Mortgage Deferral Relief for Homeowners

DLC Canadian Mortgage Experts • Mar 19, 2020

Canada’s big banks announced this week that those struggling due to the COVID-19 crisis will be able to defer their mortgage payments for up to six months.

The coordinated announcement came from the Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank and TD Bank, and will be granted on a case-by-case basis to assist those disrupted by the COVID-19 pandemic.

“These measures are an important first step and underscore the resilience of Canada’s financial system and the strength of our major banks,” the joint news release reads. “Banks will monitor evolving economic conditions and consider other measures if necessary.”

The announcement has clearly come as a relief to many who have been laid off temporarily and worried about how they will cover their mortgage payments in the coming months.

One mortgage broker-owner wrote on Twitter that his office had received 26 calls before noon on Tuesday from clients inquiring about the 6-month deferral option.

The Canada Mortgage and Housing Corporation (CMHC), which provides default insurance for insured loans, also announced that it will allow up to 6-month deferrals for mortgage payments.

In a Twitter post, CMHC President and CEO Evan Siddall thanked the banks for stepping up to assist mortgage-holders. But he also reminded borrowers that these deferrals are not a blanket measure available to all mortgagors.

“Mortgage deferrals are being offered to those who NEED them. This is a compassionate program by banks, mortgage lenders, @CMHC_ca , @GenworthCanada and @CanadaGuaranty ,” he wrote in a separate post. “It is a deferral, not a general amnesty. No shortcuts, only relief: we all need to pay our bills if we can.


In addition to the mortgage payment deferral measure, CMHC published a reminder that it and other mortgage insurers offer additional tools to lenders that can assist homeowners struggling though financial difficulty. “Our default management tools include: payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses and special payment arrangements,” it noted in a statement.

How Are Other Mortgage Lenders Responding?

MCAP

MCAP, one of the country’s largest independent mortgage financing companies, has reached out to its clients reminding them of existing mortgage features they can take advantage of. Those include MCAP’s Skip a Payment Program, where homeowners may skip a payment at any time, as well as its Hold a Payment Program, which allows payments to be deferred for a specified period of time.

“Given recent global events, MCAP understands that these may be difficult times for its homeowners,” the company posted in an online notice to clients.

While its call centre is experiencing heavy volumes, clients can contact MCAP here.

Equitable Bank

“At Equitable Bank, we are standing alongside Canada’s six largest banks to help provide financial relief to Canadians impacted financially by COVID-19,” noted CEO Andrew Moor in a statement. “We are committed to working with personal and small business banking customers on a case-by-case basis to provide flexible solutions that help them manage through challenges such as pay disruption, childcare disruption due to school closures, or challenges resulting from the COVID-19 virus itself. This support will include up to a six-month payment deferral for mortgages.”

Moor told CMT that nearly the entire EQ Bank team is now working from home for the safety of them and the community, and that clients can best reach out with questions via email at customerservice@eqbank.ca.

“Obviously there are a lot of calls and it is tough to live up to the service standards we aspire to, but our customers should be assured that we will get back to them and will act in a sensible and compassionate manner,” he said. “Equitable Bank is here to help our customers.”

Home Trust

Home Trust, one of Canada’s leading alternative lenders, published its own statement on Tuesday.

“At Home Trust, we recognize that the COVID-19 virus is creating unprecedented challenging circumstances for everybody,” it reads. “We are committed to work with our customers on an individual basis to support you as you manage through these extraordinary times. If you have been directly impacted by COVID-19 and need to better understand your options with Home, please reach out to us…”

Those wanting more information can contact homehelps@hometrust.ca or call 1-855-270-3630, but are warned of high call volumes.

If you are in a place where you might need to defer your mortgage payments, please don't hesitate to contact any of our Canadian Mortgage Experts for advise in these tough times, we're here to help!

This article was written by Steve Huebl and was originally published on Canadian Mortgage Trends on March 19th 2020

RECENT POSTS 

RRSP As A Downpayment

By DLC Canadian Mortgage Experts • 28 Dec, 2022
Did you know there’s a program that allows you to use your RRSP to help come up with your downpayment to buy a home? It’s called the Home Buyer’s Plan (or HBP for short), and it’s made possible by the government of Canada. While the program is pretty straightforward, there are a few things you need to know. Your first home (with some exceptions) To qualify, you need to be buying your first home. However, when you look into the fine print, you find that technically, you must not have owned a home in the last four years or have lived in a house that your spouse owned in the previous four years. Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time. You have to pay back the RRSP You have 15 years to pay back the RRSP, and you start the second year after the withdrawal. While you won’t pay any tax on this particular withdrawal, it does come with some conditions. You’ll have to pay back the total amount you withdrew over 15 years. The CRA will send you an HBP Statement of Account every year to advise how much you owe the RRSP that year. Your repayments will not count as contributions as you’ve already received the tax break from those funds. Access to funds The funds you withdraw from the RRSP must have been there for at least 90 days. You can still technically withdraw the money from your RRSP and use it for your down-payment, but it won’t be tax-deductible and won’t be part of the HBP. You can access up to $35,000 individually or $70,00 per couple through the HBP. Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.

Is There A Difference Between A Deposit And Downpayment

By DLC Canadian Mortgage Experts • 21 Dec, 2022
If you’re new to the home buying process, it’s easy to get confused by some of the terms used. The purpose of this article is to clear up any confusion between the deposit and downpayment. What is a deposit? The deposit is the money included with a purchase contract as a sign of good faith when you offer to purchase a property. It’s the “consideration” that helps make up the contract and binds you to the agreement. Typically, you include a certified cheque or a bank draft that your real estate brokerage holds while negotiations are finalized when you offer to purchase a property. If your offer is accepted, your deposit is held in your Realtor’s trust account. If your offer is accepted and you commit to buying the property, your deposit is transferred to the lawyer’s trust account and included in your downpayment. If you aren’t able to reach an agreement, the deposit is refunded to you. However, if you commit to buying the property and don’t complete the transaction, your deposit could be forfeit to the seller. Your deposit goes ahead of the downpayment but makes up part of the downpayment. The amount you put forward as a deposit when negotiating the terms of a purchase contract is arbitrary, meaning there is no predefined or standard amount. Instead, it’s best to discuss this with your real estate professional as your deposit can be a negotiating factor in and of itself. A larger deposit may give you a better chance of having your offer accepted in a competitive situation. It also puts you on the hook for more if something changes down the line and you cannot complete the purchase. What is a downpayment? Your downpayment refers to the initial payment you make when buying a property through mortgage financing. In Canada, the minimum downpayment amount is 5%, as lenders can only lend up to 95% of the property’s value. Securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. You can source your downpayment from your resources, the sale of a property, an RRSP, a gift from a family member, or borrowed funds. Example scenario Let’s say that you are looking to purchase a property worth $400k. You’re planning on making a downpayment of 10% or $40k. When you make the initial offer to buy the property, you put forward $10k as a deposit your real estate brokerage holds in their trust account. If everything checks out with the home inspection and you’re satisfied with financing, you can remove all conditions. Your $10k deposit is transferred to the lawyer’s trust account, where will add the remaining $30k for the downpayment. With your $40k downpayment made, once you sign the mortgage documents and cover the legal and closing costs, the lender will forward the remaining 90% in the form of a mortgage registered to your title, and you have officially purchased the property! If you have any questions about the difference between the deposit and the downpayment or any other mortgage terms, please connect anytime. It would be a pleasure to work with you.
More Posts
Share by: