New Paragraph

Mortgage Deferrals and COVID 19

CoryVance • March 21, 2020

One week into “quasi” lockdown and it certainly has been an interesting one. It is hard to know where to start so I will start with a THANK YOU and a sincere appreciation for all health care professionals and first responders. We are all thankful for all that you do.

To sum up this week in the world of mortgages is probably tough to do in a weekly blog and I probably should be doing daily ones right now, but with everyone stuck at home social distancing, I’m working on keeping sane. The top requested item this week is mortgage deferrals.

The government and CMHC being proactive on behalf of all banks and lenders said there would be solutions for Canadians impacted by COVID-19. They would be offering up to 6 months of payment deferrals on insured mortgages. This announcement, made March 13, seemed to be without any consultation or coordination with any lenders, which I guess can be expected during times like this where things are evolving minute by minute. Here was the original announcement:

I certainly do not disagree with the intention, but the execution has become nothing short of a debacle which has led to further panic and some people waiting on hold for up to 3 hours to get through to their lenders. All Mortgage Lenders including the Big 6 banks quickly responded with a coordinated effort and made a joint declaration earlier this week to support these payment deferrals. I think all parties woefully underestimated the impact of this announcement and lenders have now been hit with call volumes that have in some cases gone from the 600 calls per day to 3200 calls per day and one major lender had received over 24,000 email requests requesting information on payment deferrals in one day. The sheer magnitude of requests is staggering and causing a drag on all financial services companies and mortgage lenders. This at a time when mortgage application volumes have risen quickly.

I will try to do my part and shed some light on things we should be thinking about prior to requesting these now-infamous payment deferrals. First, let me start with the fact that there should be an immediate need or impending need. The stories are beginning to mount and we all either know someone that has been laid off or directly impacted by COVID-19 or you have been impacted. This is becoming the true financial tragedy of this pandemic. For those people, there is a potential immediate need which was the intention of the programs. For those still working and have emergency funds set aside today this would not be considered the target of this program.

Understanding things can change, but from what I have heard from lenders they are now trying to triage requests into an immediate need which would be those who have been adversely impacted and have mortgage payments coming out now or next week. The next tier would be those who have payments in the coming weeks or months and who have lost jobs or been laid off or impacted by COVID 19.

The next point would be these are payment deferrals. This means lenders are putting your payments on hold, they are not waived or disappearing. So in extreme cases, there can be up to 6 months, but please be clear these mortgage payments are not disappearing, they are just being put on hold or deferred. The financial costs to delaying these payments and having interest compounded can be very expensive when looked at over the term of a mortgage or the life of a mortgage. I will not go into detail on the actual costs, suffice to say if you do not have income coming in and you have depleted your savings this is one of the ONLY options and should be considered to help bridge the gap and help maintain your credit history. Please reach out to me directly if you have a situation and I can offer some guidance or solutions prior to calling your lenders who have now become overrun with all inquires. I can be reached at cory@coryvance.ca.

Please also keep in mind the intent of this program is to help in cases of hardship and you may be asked some qualifying questions so the lender can assess or show need. It is also important to understand how the payment deferral will work. Will it be delayed until the end of your mortgage term and impact your ability to switch or move your mortgage at the renewal date? The other big thing to consider is for those who have switched or got new mortgages in the past year. There may not be equity built up in the property yet and each lender may have to take that into consideration when assessing if they can defer payments. Once again I know I am posing more questions than answers, but with many different lenders involved each will have their own way of assessing the request much the same as each lender assesses new mortgages differently. All lenders continue to stress things will be looked at on a case by case basis.

Once again I would encourage anyone who is impacted at any level or those that may be impacted to contact me so we can have a conversation to assess some of your options. I can be reached at cory@coryvance.ca and over the next little while this will be the best way to reach me and I can follow up to schedule a call to discuss further.

On another note in mortgages and this may take most by surprise, but mortgage rates are GOING UP. Now you are saying Cory what are you talking about, the Bank of Canada just lowered rates last week. Yes, but once again in my last post on Friday, March 13 we had started to see bond yields increasing which means fixed mortgage rates would trend higher. Well, that trend continued this week and bond yields were up almost .50% this week from the all-time lows. SEE CHART showing the 5 year Government of Canada bond yields from the Bank of Canada website.

Expect to see fixed mortgage rates in the higher 2.00% range and moving above 3.00% soon.

This is not surprising because we knew all-time low rates would be short-lived and they would come up even quicker than they have come down. However, the other factor which is impacting rates, even more, is the liquidity and risk pricing that has started to skyrocket. This is when banks do not want to lend to each other, to businesses or even consumers because of the increased risk of not being paid back. This is the same as what we saw in Fall 2008 and Spring 2009 during the financial meltdown. We have now started to see variable-rate mortgages remove their discounts. So there is no more prime – 1.00% discounts on variable mortgages. These discounts with some lenders have gone down to prime or prime + .10%. The prime rate is currently 2.95% after we saw decreases of 1.00% this month and we may see further decreases. So for those with current variable discounts prime – .50% or more you should be well-positioned as we look to whether the pending storm.

At this point, I am going to stop and once again encourage any past clients or new clients to reach out so we can discuss your situation. These are challenging times for all of us and I can assure you there is no judgment on situations that have spiralled beyond your control. However the sooner we can take action the better, instead of waiting until some of your options disappear.

This brings me to one final comment on additional measures introduced under the government’s $82 billion aid plan this week which can be found here

I would encourage any that have been impacted to start the search here because you may qualify for some additional funds directly from the government which could help to make those mortgage payments before you think about deferring payments.

Stay well.
Cory

Share

RECENT POSTS  

Everything You Need to Know About Mortgage Financing in Canada

By Cory Vance • October 27, 2026
For most Canadians, buying a home isn’t possible without a mortgage. And while getting a mortgage may seem straightforward—borrow money, buy a home, pay it back—it’s the details that make the difference. Understanding how mortgages work (and what to watch out for) is key to keeping your borrowing costs as low as possible. The Basics: How a Mortgage Works A mortgage is a loan secured against your property. You agree to pay it back over an amortization period (often 25 years), divided into shorter terms (ranging from 6 months to 10 years). Each term comes with its own interest rate and rules. While the interest rate is important, it’s not the only thing that determines the true cost of your mortgage. Features, penalties, and flexibility all play a role—and sometimes a slightly higher rate can save you thousands in the long run. Key Questions to Ask Before Choosing a Mortgage How long will you stay in the property? Your timeframe helps determine the right term length and product. Do you need flexibility to move? If a work transfer or lifestyle change is possible, portability may be important. What are the penalties for breaking the mortgage early? This is one of the biggest factors in the real cost of borrowing. A low rate won’t save you if breaking costs you tens of thousands. How are penalties calculated? Some lenders use more borrower-friendly formulas than others. It’s not easy to calculate yourself—get professional help. Can you make extra payments? Prepayment privileges allow you to pay off your mortgage faster, potentially saving years of interest. How is the mortgage registered on title? Some registrations (like collateral charges) can limit your ability to switch lenders at renewal without extra costs. Which type of mortgage fits best? Fixed, variable, HELOCs, or even reverse mortgages each have their place depending on your financial and life situation. What’s your down payment? A larger down payment could reduce or eliminate mortgage insurance premiums, saving thousands upfront. Why the Lowest Rate Isn’t Always the Best Choice It’s tempting to chase the lowest rate, but mortgages with rock-bottom pricing often come with restrictive terms. For example, saving 0.10% on your rate may put a few extra dollars in your pocket each month, but if the mortgage has harsh penalties, you could end up paying thousands more if you break it early. The goal isn’t just the lowest rate—it’s the lowest overall cost of borrowing . That’s why it’s so important to look beyond the headline number and consider the whole picture. The Bottom Line Mortgage financing in Canada is about more than rate shopping. It’s about aligning your mortgage with your financial goals, lifestyle, and future plans. The best way to do that is to work with an independent mortgage professional who can walk you through the fine print and help you secure the product that truly keeps your costs low. If you’d like to explore your options—or review your current mortgage to see if it’s really working in your favour—let’s connect. I’d be happy to help.

Co-Signing a Mortgage in Canada: Pros, Cons & What to Expect

By Cory Vance • October 13, 2026
Co-Signing a Mortgage in Canada: Pros, Cons & What to Expect Thinking about co-signing a mortgage? On the surface, it might seem like a simple way to help someone you care about achieve homeownership. But before you sign on the dotted line, it’s important to understand exactly what co-signing means—for them and for you. You’re Fully Responsible When you co-sign, your name is on the mortgage—and that makes you just as responsible as the primary borrower. If payments are missed, the lender won’t only go after them; they’ll come after you too. Missed payments or default can damage your credit score and put your financial health at risk. That’s why trust is key. If you’re going to co-sign, make sure you have a clear picture of the borrower’s ability to manage payments—and consider monitoring the account to protect yourself. You’re Committed Until They Can Stand Alone Co-signing isn’t temporary by default. Even once the initial mortgage term ends, you won’t automatically be removed. The borrower has to re-qualify on their own, and only then can your name be taken off. If they don’t qualify, you stay on the mortgage for another term. Before agreeing, talk openly about expectations: How long might you be on the mortgage? What’s the plan for eventually removing you? Having these conversations upfront prevents surprises later. It Affects Your Own Borrowing Power When lenders calculate your debt service ratios, the co-signed mortgage counts as your debt—even if you never make a payment on it. This could reduce how much you’re able to borrow in the future, whether it’s for your own home, an investment property, or even refinancing. If you see another mortgage in your future, you’ll want to consider how co-signing could limit your options. The Upside: Helping Someone Get Ahead On the positive side, co-signing can be life-changing for the borrower. You could be helping a family member or friend buy their first home, start building equity, or take an important step forward financially. If handled with clear expectations and trust, it can be a meaningful way to support someone you care about. The Bottom Line Co-signing a mortgage comes with both risks and rewards. It’s not a decision to take lightly, but with careful planning, transparency, and professional advice, it can be done responsibly. If you’re considering co-signing—or want to explore safer alternatives—let’s connect. I’d be happy to walk you through what to expect and help you decide if it’s the right move for you.

STAY INFORMED

Subscribe to my newsletter

STAY INFORMED