At Mortgage Architects, we recognize that many homeowners may be looking for guidance around mortgage financing. We are committed to updating you - our customers - on the current climate and how the recent COVID-19 developments may impact your mortgage, now or in the future.

We know that things may seem uncertain now, but we are working hard to gather all pertinent information and help you to understand your options during this difficult time.

Please check back regularly to get additional and updated information as more details arise.

What is COVID-19?

As many of you have heard by now, the world is being gripped by COVID-19 (otherwise known as “Coronavirus”). According to the World Health Organization (W.H.O.), Coronaviruses (CoV) is a large family of viruses ranging from the common cold to more severe diseases.

Coronavirus disease (COVID-19) is a new strain that was discovered in 2019 and has not been previously identified in humans. Common signs of infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.

Standard recommendations to prevent infection spread include regular hand washing, covering mouth and nose when coughing and sneezing, thoroughly cooking meat and eggs. Avoid close contact with anyone showing symptoms of respiratory illness such as coughing and sneezing.

Financial Effects

Since being labelled a pandemic per the World Health Organization (W.H.O.), the effects of COVID-19 have begun to ripple through the world’s economy - including Canada - and causing a number of different effects. To help keep you up to date on what is going on financially, we have compiled a list of recent announcements by the Ministry of Finance, the Bank of Canada, and OSFI:

• Minister Morneau announced a new Business Credit Availability Program, adding $10 billion of financing, through Business Development Bank of Canada and Export Development Canada, to support Canadian Businesses.  
• The Bank of Canada lowered the overnight rate from 125 to 75 bps, to reduce the interest cost burden for businesses and consumers alike. The bank also increased its Government of Canada bond buyback program.  
• OSFI reduced the Domestic Stability Buffer from 2.25% to 1%, thereby freeing up $300 Billion additional lending capacity for Domestic Systemically Important Banks (D-SIBS).  

Homeowner Need to Know

This can be a difficult time for a homeowner as many families are self-isolating or are in quarantine due to the virus. This can result in loss of monthly income and financial instability, which can cause stress and concern about your home and mortgage.

We have compiled the following information from our partners to keep you informed as to some of the recent developments surrounding mortgages, as well as what lenders are doing to help mitigate financial strain during this difficult time.

Here are a few important considerations for homeowners and potential homeowners to keep in mind during this time:

• Mortgage application turnaround time may be an upwards of 15 days in some cases given the current climate and growing developments.
• If you require an appraisal, there can be issues that could delay or prevent access of the appraiser into the home. Lenders are being proactive and exploring policy options to help circumvent this as best they can.
• Don’t forget this situation is new to our mortgage brokers and lenders as well as the rest of us, so they are being cautious yet innovating to overcome any issues.
• Rush transactions will be met with challenges.

The Stress Test

In light of this growing situation, OSFI has announced that it is suspending all consultations, including those regarding changes to the proposed B-20 benchmark rate. In addition, the Minister of Finance postponed the announced April 6th qualification change for insured mortgages. In short, until further notice, the Bank of Canada posted 5-year rate will continue to be used for mortgage qualification.

What Lenders are Doing

We understand that the COVID-19 outbreak is taking a toll on families across the country with many parents being out of work or quarantined. As an industry built on homeowners, many of our major lenders have pulled together to provide you beneficial options during this time and help alleviate some of the financial stress.

Depending on your lender, there may be options available to you during this time such as:

• Deferral of payments
• Re-amortization of the loan
• Capitalization of outstanding interest & costs
• Special payment arrangements

The Big Banks

Big banks including Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada have opted to provide coordinated relief for their customers.

These banks will be working with personal and small business clients to cope with the economic fallout of the virus. Effective immediately, all six are introducing mortgage payment deferrals of up to six (6) months and are also offering relief on other credit products for those families who are facing hardship during this situation.

Mortgage Insurers

In addition to the big banks, mortgage insurers including CMHC, Genworth & Canada Guaranty are working to help homeowners who have been financially impacted by the COVID-19 outbreak. Starting now, they have increased their flexibility and are allowing payment deferral of up to 6 months for home-owners who, primarily but not exclusively, purchased with less than 20% down.

Genworth Canada released a statement on March 16, 2020 outlining their Homeowner Assistance Program (HOAP), which is designed to assist Genworth Canada-insured homeowners who experience sudden financial setbacks that could temporarily impact their ability to meet their mortgage obligations. Borrowers who qualify under the lender’s internal guidelines and Genworth’s Homeowner Assistance Program will receive up to six (6) months of relief allowing borrowers some time to recover and focus on what’s important.

Canadian Mortgage and Housing Corporation (CMHC) is offering tools that can assist homeowners who may be experiencing financial difficulty. Their default management tools include: payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses and special payment arrangements. 

CMHC also provides mortgage professionals with tools and the flexibility to make timely decisions when working with you to find a solution to your unique financial situation, including:

• Converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur.
• Offering a temporary short-term payment deferral. Your mortgage professional may be prepared to offer greater payment flexibilities, particularly if previous lump sum prepayments have been made, or if you have previously chosen an accelerated payment schedule.
• Extending the original repayment period (amortization) in order to lower your monthly mortgage payments.
• Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period.
• Offering a special payment arrangement unique to your particular financial situation.

Canada Guaranty

In addition to Genworth Canada and CMHC, Canada Guaranty is also doing their part to support homeowners during this difficult time. Per their statement released on March 16, 2020 they noted with their Homeownership Solutions Program, lenders currently have the ability to capitalize up to four (4) monthly mortgage payments.

However, to assist eligible homeowners as they navigate through these challenging circumstances, Canada Guaranty is prepared to extend this program option to allow the capitalization of up to a maximum of six (6) monthly payments. This is assuming the original insured loan amount is not exceeded, request for capitalization is received before September 13, 2020 and that the lender confirms the capitalization is being applied reasonably to help mitigate short-term financial difficulty resulting from COVID-19.

Lender Contact Information

During this time, it is best to discuss your mortgage with your mortgage broker or lender should you have any financial concerns surrounding the COVID-19 outbreak. Please be advised, there may be longer than normal wait times for calls during this situation and to expect at least 20-30 minutes for a representative. Be sure to have your mortgage number available to ensure smoother service and remember to be kind!

Here are some direct contact numbers for various lenders across the country:

Emergency Funds During COVID-19

• GST Credit: $400 for single adults, $600 for couples
• Child Tax Benefit Top-Up: An additional $300 per child
• Student Loan Payment Defferal:
• 6 month timeframe
• No payments
• No interest accrual
• Indigineous community based support fund
• $200 million provided for community resources such as:
• Shelters/homeless needs
• Sexual abuse/transition house needs
• 10% wage subsidy for small to medium sized busineses for employees
• $25,000 per employer
• Ensured Mortgage Protection Program
• $50 billion provided
• Payment deferrals
• Special payment arrangements
• Bank Supports
• Auto loans
• Deferral of payments possible
• Contact bank directly
• Speak to your institutes
• Emergency Support Fund
• $5 billion - more information to come

What Can You Do?

If you find yourself facing financial difficulties as a result of job loss or income reduction during this time, it can be overwhelming and may leave you feeling stressed and unsure of what the next steps are.

To make it easy, we have put together three simple steps you can do to help resolve your financial difficulties and ensure you can focus on more important things such as your family and your health.

1. Cut Down on Costs

For anyone that is currently out of work due to COVID-19 or has found themselves at reduced hours, it is a good idea to look at your finances for ways to cut down on non-essential costs. Some ideas for reducing your monthly expenses include taking a look at streaming services, your phone data plan and gym memberships which can add up.

2. Talk to Your Mortgage Professional

Your Mortgage Architects mortgage brokers are working hard to stay on top of all information surrounding the development of COVID-19 as well as the responses from Bank of Canada and the Ministry of Finance to ensure the most up-to-date and accurate information to assist you. They can help explain the options available to you and provide further understanding as to how this situation may affect your interest rates and mortgage payments.

3. Contact Your Credit Card Companies and Lenders

Many families and individuals cannot afford to lose their income, or even see it decrease. If you are in debt or living paycheck to paycheck, you may already find it difficult to make bill payments. Unfortunately, missing these payments can have long-term negative effects. Before it gets to this point, it is a good idea to contact your lenders, banks or credit card companies to see if there are options.

4. Find alternatives

Whether you are temporarily laid off, let go of your company or do not have enough sick days to cover your time at home.

• You can try these alternatives if you are out of work due to COVID-19 and in need of financial assistance.
• Employment Insurance (EI) might be an option. Services Canada has reduced the wait period and is currently offering EI assistance to individuals affected by the virus.  
• Have skills you can utilize online? While you’re off work or in quarantine, consider freelancing. Websites such as UpWork and Freelancer.com have jobs from across the globe from accounting to website development.

5. Stay Informed

Information is power and the more information you have at your disposal as this situation develops, the better prepared you will be to manage your household and finances. We will be providing updated information right here on our website as this situation develops.

Additional Support

We understand that along with financial hardships, many individuals are also experiencing a drastic toll on their mental health with regard to COVID-19. For any individuals that are currently managing mental health disorders (anxiety, depression, bi-polar disorder, etc), please be sure to check with your mental health professional during this time if you are experiencing an increase in your symptoms.

In addition to your regular care, the Canadian Mental Health Association is working hard to continuously update their website with resources related to pressures, anxiety and other stressors in the midst of this pandemic. For more information, please visit their website here. They also have a 24/7, toll-free crisis line at 1-833-456-4566.

Some other programs that may assist you and help reduce the mental and emotional burdan of this situation can be found below.

Employee Assistance Program (EAP): This dedicated program is providing the following:

• 24/7 confidential access to professional support to help employees manage stress, anxiety, grief, financial concerns, and much more.
• Employees and managers can connect to get support by phone, video, or chat anytime, anywhere.
• Vast library of online resources for coping with trauma, building resiliency, self-care, managing change, and more.
• Manager consultations to support leaders in dealing with sensitive workplace situations.

Click here to visit their website and learn more.

First Access: This program provides global support for unique needs and for organizations who are not EAP clients. Some of the features they offer are:

• Counselling and traumatic event support to address unique needs worldwide
• Allows organizations - even those without a formal EAP in place - to access support services, as needed, to ensure timely and effective issue resolution

Click here to visit their website and learn more.

Stay Safe - and Wash Your Hands!

Remember during this time to practice proper hand-washing procedures and minimize your contact with other people to ensure that you are not unknowingly contracting or passing along COVID-19. We can overcome this, together!