The COVID-19, or coronavirus crisis has left many homeowners in Canada without a job or with reduced hours and wondering how to pay their mortgage. Homeowners facing financial stress may be eligible for a mortgage payment deferral up to 6 months to help ease the financial burden. The COVID-19 Mortgage Payment Deferral program will be ongoing. You can apply at any time during this outbreak.
Mortgage payment deferrals can help you during times of financial hardship — like unemployment or reduced employment due to the Coronavirus (COVID-19) outbreak.
-The deferral is an agreement between you and your lender. Contact your lender directly as soon as possible!-
The agreement indicates that you and your lender have agreed to pause or suspend your mortgage payments for a certain amount of time. It’s also known as a mortgage payment deferral agreement or mortgage forbearance agreement and it’s a temporary measure.
After the agreement ends, your mortgage payments return to normal and the missed payments — including principal and accumulated interest – repaid.
A mortgage deferral helps you when you’re struggling to make your payments by allowing you to skip your mortgage payment for a specified amount of time.
The mortgage deferral agreement does not cancel, erase or eliminate the amount owed on your mortgage. At the end of the agreement, you will have to resume payment according to your regular payment schedule.
However, the interest that hasn’t been paid during the deferral period continues to be added to the outstanding principal of your mortgage. This can affect the total amount you owe in accordance with the original payment schedule.
Yes, you’ll need to repay the amounts of the skipped payments including both principal and interest. Details of the repayment will vary according to the specific lender and situation.
The interest on your mortgage that hasn’t been paid during the deferral period continues to be added to the outstanding principal of your mortgage. When your payments start again, your mortgage payment might be based off the total amount you then owe to pay off your mortgage in accordance with the original payment schedule.
It is very important to know that mortgage payment deferrals focus solely on your mortgage. It won’t affect other payments regularly withdrawn, like property taxes and life/disability insurance.
Your lender — your bank or your mortgage professional — can tell you if you are eligible for a mortgage payment deferral. Also, with the COVID-19 outbreak, CMHC is allowing lenders to offer deferred payments for insured mortgages.
All mortgage insurers offer a number of tools to lenders that can help you when you’re in financial difficulty and are struggling to meet your mortgage obligations.
Any borrower facing financial difficulty should contact their lender — your bank or mortgage professional — to learn what options are available.
The payment deferral is for people who will struggle to make their next mortgage payment. If you are in a position to make your payments, you should.
If — at any point in this crisis — you think you won’t be able to make your regular mortgage payment, it’s important for you to take quick action. Contact your bank or mortgage professional immediately before you miss a payment.
For all of your mortgage questions, broker Kevin Decker can be reached after at 250 619 2262 and broker Jason Barudin can be reached at 250 668 2203.
“LIKE” our Facebook page or “SHARE” this post to be entered into our quarterly draw for a $150.00 gift card!!!
We thrive off of your continued support and client referrals. Let us reward you for helping us get our name out into the community! Please mention who referred you or how you heard from us, when filling out your mortgage application. The name you give us will also be entered into the same draw for coming in to see us!