My Mortgage Blog

We knew that mortgage deferrals wouldn’t last forever. Now that they’ve ended what options are available to Canadians still struggling?

How it all started

When the pandemic hit Canada in March we were asked to stay at home. All but essential services remained open. Many were concerned about how they were going to pay the bills, including their mortgages. To their credit, lenders and mortgage insurers stepped up to the plate. They offered homeowners the option to defer their mortgage payments for up to six months.

That strategy worked.  The number of Canadians who asked for a deferral or a skip-a-payment was 778,000.  Roughly 32% of Canadians who opted to defer their mortgage payments (254,000) resumed payments as of August 31.

The deferrals ended on September 30. While many have now resumed payments, some may be still struggling if their employment situation hasn’t improved, or if there are now other unexpected circumstances.

Further options beyond mortgage deferrals

There was some talk that the CMHC, along with the private insurers Genworth and Canada Guaranty, might step forward to assist these homeowners further. Extended amortizations, special payment arrangements, and/or adding missed payments to mortgage balances were a few of the options under discussion.

The three insurers have not confirmed any details yet and they continue to monitor and review situations on a case-by-case basis.

For those still affected by the COVID fallout, a quick review of lenders found that many are willing to assist those still struggling.

  1. Borrow from a line of credit. This is fine if there’s a short gap between payments restarting and when you go back to work.
  2. Ask for a deferral extension.  Lenders don’t want to take your house and will work with you to come up with a solution.
  3. Skip-a-payment. Some lenders offer alternative options such as skip-a-payment, for example, that you can explore if you made additional payments prior to deferrals.

Canadian Real Estate Market

Some Canadian homeowners may exhaust their options, and may find themselves deciding to sell. In that case, the housing market news is good. The market has remained surprisingly strong in many parts of the country, supporting many sellers, unlike previous economic downturns.

In July, for example, average home prices were up a shocking 14.3% compared to the same period last year, according to the Canadian Real Estate Association (CREA). And home sales hit an all-time monthly record in August as reported through the Canadian MLS Systems.

I am available to review all options that are currently available so, let’s talk!