The COVID-19 situation is unprecedented, and is causing considerable financial stress, especially to those who now find themselves with reduced or no income.
Here are some of the most frequently asked mortgage related questions we’ve been receiving:
- Do I qualify for mortgage relief?
- Can I defer my mortgage payments?
- How do I contact my lender?
- Is this the right time to refinance my mortgage?
- How do the interest rate cuts by the Bank Of Canada affect my mortgage rates?
Do I qualify for mortgage relief?
All lenders and banks are willing to work with their clients in this COVID 19 environment.
For lenders that have online customer portals, this will be the easiest (least frustrating) method. As you can imagine, customer services lines are very busy at this time.
A few things to consider:
- Is your payment date within the next 7 days? If yes call in, if not, please wait
- Relief is not automatic, you need to communicate with your lender. They will go through a “needs test” based on how COVID-19 is affecting you. A custom solution will be determined based on your situation
- If you can still pay, you should. This is not “free” money. It will need to be paid back. And in most cases, the “interest clock” is still ticking.
- For those directly affected and have need, there are multiple options of how the relief can happen. Some mortgages already have a “skip a payment” or “hold a payment” option built in, mortgages insured by CMHC may be able to be re-amortized back to the original term (25 yrs, 30 yrs, etc), and banks have options to defer the payment up to 6 months (remember, you still owe this money, so your debt is growing)
- For some, restructuring your mortgage OR debt through refinance or other borrowing options, may actually give you longer term relief.
It is great to have options to bring much needed relief in this environment, so please do not feel isolated or left out – Please reach out to us, we can help.
As stated above: If you can still pay, you should. This is not “free” money. It will need to be paid back. In most cases, the “interest clock” is still ticking for each payment deferred.
Also, some mortgages already have a “skip a payment” or “hold a payment” option built in, mortgages insured by CMHC may be able to be re-amortized back to the original term (25 yrs, 30 yrs, etc), and banks have options to defer the payment up to 6 months.
How do I contact my lender?
Here’s a handy list of lenders and their phone numbers:
|Alterna Credit Union||1-877-560-0100|
|Desjardins Credit Union||1-855-688-2433|
|Duca Credit Union||1-866-900-3822|
|First Calgary Financial||403-736-4000|
|First National Financial||1-888-488-3313|
|First Ontario Credit Union||1-800-616-8878|
|Meridian Credit Union||1-866-592-2226|
|Prospera Credit Union||1-888-440-4480|
|RFA/Street Capital Mortgage Begins with 4||1-866-939-5005|
|RFA/Street Capital Mortgage Begins with 6||1-877-776-6888|
|RFA/Street Capital Mortgage Begins with 7, 8, or 9||1-833-228-5697|
Is this the right time to refinance my mortgage?
It depends on your particular mortgage details!
- If you have an existing variable rate mortgage with a significant discount from Prime (EX – Prime minus 1%) – Hold on to that, you are going to be enjoying some very low rates for the foreseeable future!!
- A few things that will determine if you should consider refinancing are:
- Variable rate concerns you, and you want to lock into a low fixed rate
- Your fixed rate is more than 3%
- You have equity in your home, and would like to consolidate other debts at low rates
If you identify with any of the points in #2, contact your lender and get a quote on the cost to break your mortgage early. Provide us with that info, so we can “crunch the numbers” on a new refinance. These numbers will show if it is worth considering. If not, you have peace of mind, if yes, you can start enjoying the savings and monthly cash flow relief!
How do the interest rate cuts by the Bank Of Canada affect my mortgage rates?
The Bank Of Canada has recently cut an additional 50 basis points of overnight rates BUT independent banks can make their own rates, and do not have to follow these cuts.
However, many banks are discounting at the full amount to entice lending. But that can change at any time, should they decide it would be to their advantage to raise rates.
As of writing, the current Bank Of Canada overnight rate is at 0.25%, and as banks follow these lower rates, it greatly benefits people with variable rate mortgages.
Stay tuned for updates to this FAQ as more information is made available!
As always if you have a question that hasn’t been answered here contact us today.