A mortgage deferral allows you to delay mortgage payments for a specific time. Whether you have lost your job, are dealing with a health crisis that is affecting your family and financial situation, or just looking for some “breathing” room with funds, this agreement on the time frame for repayment of your mortgage is between you and your mortgage lender. Once the period of deferral ends, you must resume making payments to your mortgage, and repaying the amount you deferred.
This can be done in multiple ways by either lengthening your amortization period, increasing your regular mortgage payments to make up for the deferral period, or adding these deferred payments to the balance of your mortgage once the term ends. It is important to note, your mortgage lender will continue to charge you the interest owed on your mortgage during the deferral.
COVID-19 Mortgage Payment Deferral
COVID-19 lockdowns are one example of why and when mortgage deferrals are needed. Many people are adversely affected financially by pandemic restrictions and continue to struggle. Whether it results from being laid off work or shutting down a business, a lot of financially stressed Canadians need mortgage deferrals. Homeowners may be given the option to defer mortgage payments for up to six months.
The five major banks have different methods to request a mortgage deferral, as outlined below:
TD Mortgage Payment Deferral
TD Mortgages offers “flexible payment” options to help clients. When things are going well financially, you can speed up your payments, make a lump sum payment of up to 15% of the mortgage (once a year), or increase payments.
When things are not going well, you can take an emergency break from your mortgage payments by skipping one monthly payment. This can only be requested once yearly, or four times over your amortization period. You can also take a four-month “payment vacation” if you have prepaid an amount that decreases your amortization schedule. These can be paid by increasing your regular payments or a lump sum.
TD is committed to helping clients through COVID-19, so should you have issues with your mortgage payments, reach out. Customer services around mortgage deferral are available 24/7 through their EasyWeb online banking and TD App, as well as their EasyLine Telephone Banking service.
RBC Mortgage Payment Deferral
RBC offers a “skip-a-payment” mortgage option, once every 12 months. There are some stipulations: your mortgage cannot be in arrears; the present balance of the mortgage, together with the amount that you want to defer, may not go over the original balance of the mortgage. The “skipped” payment can be four weekly, two (consecutive) bi-weekly, or one full month.
You can skip a payment by signing on to your RBC online banking account, then heading to the Account Summary. Find your mortgage, and then select a “Skip A Payment” option at the bottom of the payment. These requests can take up to five days to process. If you find you cannot defer your mortgage payment via this method, book an appointment online to speak with an RBC advisor.
CIBC Mortgage Payment Deferral
Due to the fallout of the COVID-19 lockdowns, CIBC is encouraging clients to complete a CIBC financial assistance form when requesting a mortgage payment deferral. Up to six months’ worth of payments can be deferred. If the situation is urgent, CIBC recommends reaching out to your branch.
BMO Mortgage Payment Deferral
BMO offers two mortgage deferral options. “Take A Break” is one option, where clients can defer a one-month payment. There is also the “Family Care” option where clients can skip up to four payments each year if one parent or caregiver must leave their job to care for a sick family member or a new baby. For more information, you can visit their website, and BMO encourages clients who are interested in skipping a mortgage payment to reach out online, via telephone banking at 1-844-837-9228, or at their local branch.
It is important to note, their COVID-19 relief program for mortgages has ended as of September 30, 2020.
Scotiabank Mortgage Payment Deferral
As of September 30, 2020, mortgage payment deferrals are no longer available for clients that are experiencing financial hardship. Scotiabank customers can reach out to their local branch, online, or via the telephone banking customer service line for financial relief.