In an effort to ease the financial hardships that many Canadians are currently facing, Canada’s big banks have begun offering mortgage payment deferrals for homeowners and business owners across the country.
Here’s what you need to know:
1. What is a mortgage deferral?
When you defer your mortgage, you’re not skipping a payment, you’re postponing it. At the end of the deferral period, your deferred payments will be added back to your regular mortgage amount.
2. How long will it last?
Currently, the banks have agreed to defer payments for up to six months.
3. What banks are deferring mortgage payments?
RBC, TD, BMO, Scotiabank, CIBC, and National Bank will offer relief for their clients through mortgage deferrals as well as relief for additional credit products.
4. Will deferred payments collect interest?
None of the aforementioned banks have committed to interest-free deferrals. Most will be reviewing requests for mortgage deferrals on a case-by-case basis, with results depending on the client file and loan parameters.
5. What is the Canada Mortgage Housing Corporation doing to help?
CMHC will be implementing a revised version of the Insured Mortgage Protection Program, which they previously put into effect during the 2008 financial crisis. They have also extended mortgage forbearance for insured mortgages with Genworth Canda and Canada Guaranty.