Canadians should renegotiate their mortgage amid COVID-19 concerns
Canada’s biggest banks have fielded hundreds of thousands of requests from homeowners seeking to hold off making mortgage payments under a new coronavirus-related relief plan.
More than 213,000 requests to defer or skip payments have been completed or are being processed since the country’s six largest banks announced the plan last week, according to Mathieu Labreche, a spokesman for the Canadian Bankers Association In less than 10 days, the banks have deferred payments or are processing deferrals on about 4.5 per cent of the total number mortgages in their portfolios, he added.
“The large number of customers that have been helped continues to grow as the result of concerted efforts by front-line workers, contact-center agents and operations teams working diligently,” Labreche said in an interview Thursday.
Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia and three other large lenders announced plans on March 17 to provide financial relief to Canadians impacted by the economic consequences of Covid-19, with mortgage deferrals among the measures introduced. Customers in good standing who have been impacted by the pandemic can apply, with deferrals available for an indefinite period and no deadline to apply, according to the association.
Under the plan, payments are skipped for a period of time, and interest accrued is added to the mortgage’s outstanding balance. The additional interest is incorporated into future monthly payments when they resume, or upon renewal at the end of the mortgage’s term.
The lenders, which also include Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada, had about CUS$1.06 trillion (US$750 billion) in mortgage balances at the end of January, representing nearly two-thirds of the country’s overall mortgage market, according to financial statements and Bank of Canada data.
The lenders are reporting higher volumes of calls related to mortgages and other loans, along with requests for deferrals, since the relief plan was introduced.
“Last week, our contact centers in Canada received close to 80,000 calls per day, with calls to our mortgage and loan teams up 500 per cent,” Scotiabank Chief Executive Officer Brian Porter said in a March 22 statement.
CIBC is among banks adding digital capabilities so customers can make requests without going to branches, while boosting staff in contact centers and increasing outreach by advisers.
“The need of Canadians for relief and support is at a scale and urgency we have never seen before as an industry and as a bank,” Laura Dottori-Attanasio, who oversees personal and business banking in Canada, said in a statement. “While we have helped tens of thousands of clients in the first week, we know we have much more to do.”
Toronto-Dominion is “receiving thousands of requests daily for mortgage deferrals, and have processed thousands already,” spokeswoman Julie Bellissimo said in an emailed statement. “We are moving quickly through applications so that we can help provide our customers some immediate financial relief.”