Understanding Mortgage Deferrals in Canada During COVID-19

COVID-19 has inevitably changed our world since it started last December 2019 in Wuhan, China. As of April 26th, 2020, there are already thousands affected in the country and millions globally… and so is our economy worldwide.

You’re fortunate if your company or business has a work from home opportunity; however, for those who work in the service industry, this virus may have hit them the hardest. One of the most resounding questions that we hear today from the news is: how will we survive? How do we keep a roof over our heads?

What about our mortgage payments?

To help ease the financial burden, most lenders are offering mortgage deferrals.

What is a Mortgage Deferral?

A mortgage deferral allows you to suspend your mortgage payments for a specified period of time that is decided by the lender.

Most mortgage lenders are now offering mortgage deferral programs, giving borrowers a chance to relieve some stress while still managing to keep a roof over their heads. Consult with your lender for more details.

Advantages of a Mortgage Deferral 

Having a mortgage deferral allows you to put your monthly mortgage payments towards the essentials, such as food, electricity, water, etc.

To put it simply, a mortgage deferral helps you to provide the bare essentials for you and your family.

Disadvantages of a Mortgage Deferral 

A mortgage deferral doesn’t mean you have to pay today but you’ll have to pay later.

Your deferred payments will accumulate and get added to your mortgage amount. 

How to Benefit from a Mortgage Deferral?

When mortgage deferrals opened to the public as an option, thousands leaped to take advantage of it. Because numerous applications are sent daily, you may experience some delays. For faster processing, banks have online forms with the requirements. For lenders, you may have to call them or your Mortgage Broker for help.

Conclusion

If you can keep up with your mortgage payments, I would encourage you to do so. But if you’re currently having money trouble, it’s recommended that you too, take advantage of it… stay safe and enjoy the quality time with your loved ones.


Daisy Raouph, CLU, CHS, specializes in mortgage financing solutions and financial services. A Mortgage Broker and Financial Security Advisor with over 30 years of experience in financial services. Contact us today to review your mortgage financing options. We can help!