These are unprecedented times. Hard-working, responsible people are finding themselves sick, temporarily unemployed or unable to work due to family obligations. If COVID-19 has you worried about how you’ll pay your mortgage, there are options available to help support you during this difficult time.
Canada’s banks, the federal government and the Canada Mortgage and Housing Corporation are stepping in with relief in the form of a six-month mortgage deferral program.
Here’s what you should know.
What is mortgage deferral? And how could it help me?
A mortgage deferral is an agreement between you and your lender that you will suspend your mortgage payments for an agreed-on, temporary amount of time.
Once a mortgage deferral ends, your mortgage payments go back to normal and the missed payments, including principal and accumulated interest, are repaid.
A mortgage deferral can be helpful when you are facing a financial hardship, like unemployment or reduced employment due to COVID-19.
What is the mortgage relief offer?
The mortgage deferral offer is a pause on mortgage payments themselves, not a forgiveness of the overall mortgage obligation, which means that interest will continue to accumulate and be added to your debt. In some cases the interest will be compounded. There may also be options available to pause your mortgage credit protection insurance premiums.
Am I eligible for mortgage payment deferral?
The program is being administered on a case-by-case basis to individuals whose mortgages are in good standing, and will be available until at least June 30, 2020.
Should I defer my mortgage payments?
Individuals considering this option should give it careful thought: think about how it will impact their own situation and recall that the program is designed to alleviate temporary hardship due to the impact of COVID-19. Depending on the current position of your finances, it may be better to continue with your mortgage payments. If you think your unemployment or debt situation could be longer term, you might wish to discuss other options that may be available.
What should I consider before deferring my mortgage?
In order to determine whether the mortgage deferral program is for right for you, consider the following:
- Your current spending. Now is a good time to make a distinction between what is discretionary and what isn’t, what you have to pay for and what you can get by without.
- All of your debts. From your mortgage to your credit card bills, make sure you are prioritizing your debt properly. Cash saved by not paying a mortgage could, for instance, go towards paying down credit cards, even just the minimum.
- Are other bills being deferred during this period, such as property taxes? You may also be eligible for other COVID-19 government relief programs.
- Check your cash flow and see what you are expecting to receive in the near future. Our Personal Cash Flow Calculator can help get a better idea of where you spend your money.
If you really are in a predicament because of the COVID-19 crisis where the disruption of cash flow is preventing you from making a mortgage payment, a deferral might be your best route.
What can I expect at the end of my six-month mortgage deferral term?
When things do get “back to normal,” remember that the total amount owing on your mortgage will be higher, due to the interest that has accrued. In that case, you might wonder how you will “catch up.” In the case of TD, your payments will be adjusted automatically at the start of your next term or, if you change anything else before renewal, at that time, to ensure your mortgage is paid off at the end of your original amortization period.
You can speak with your financial provider to see what other options may be available, including the potential for a lump sum payment or increasing your payments to help you get back on track sooner.
How do I apply for mortgage payment deferral?
If you think a deferral of payments may be right for you, you can find out more about TD’s relief offers, please HERE
You will first be directed to the EasyWeb login page and asked to log in with your EasyWeb credentials. You will receive an email response notifying you of the outcome of your request. If you are not currently registered for EasyWeb,
register online today.