First off, all lenders are granting mortgage deferrals on a case-by-case basis, but from what we hear that they are being very accommodating. As of early April 2020, nearly half a million Canadian customers have applied for Mortgage Deferral financial relief from their banks.
Highlights, and What To Expect:
- This is not an interest free program. Interest will accrue on your principal balance through the deferral period.
- Each lender has their own policies regarding how people will qualify for a deferral. Some may require direct proof of how the Covid-19 pandemic has affected you, some may not. There is no consistent policy to refer to. To find out if you qualify, you must call your lender directly. Click here for a list of lenders and their Covid-19 specific contact information.
- Banks are experiencing extremely high call volumes. Expect a 2-4 hour wait on hold to speak with your bank. In some cases banks are requesting contact via email or website forms, check with your bank on their preferred method of contact.
- There is no consistent policy on how the deferral is paid back. Some lenders will simply add the accrued interest to the balance of the mortgage and recalculate your payment after your six month period, to keep your amortization the same. Other lenders will add the interest to your balance and not adjust your payment, effectively extending out your amortization period due to the higher balance.
- DO NOT assume that you are granted a deferral without actually talking to your bank and getting confirmation directly from them. If you have not been able to reach your bank you are still expected to make your mortgage payment.