Deferring Mortgage Payments. (Covid-19)
Sukh Sohal • March 23, 2020
In response to the Covid-19 crisis; for those individuals financially affected, banks and the government have announced that payment relief may be available for up to 6 months of deferred mortgage payments.
As information is changing daily, or hourly, if you have any questions, please contact us directly to discuss your financial situation. The following information is a general guideline, each lender deals with things a little differently. So, here’s what you need to know.
Do you qualify for deferred payments?
Just because lenders are offering deferred mortgage payments, doesn’t mean you will qualify. Lenders are looking at each case individually and will only offer deferral upon their sole discretion. If you haven’t experienced income disruption, you won’t be eligible for payment deferral.
To qualify, you will have to prove not only that you have been directly financially impacted by Covid-19, but that you have no other means of making your mortgage payments. In other words, you have to prove genuine financial hardship.
Before making an application to your lender for deferred payments, you should consider applying for EI and continue making your payments as scheduled. Good advice is only to contact your lender if you have an immediate need and you would otherwise default on your payments.
Deferred doesn’t mean free
To be clear, deferred does not mean free. If you defer your payments for up to 6 months, you will still be responsible for paying that money to the lender. In fact, at most lenders, deferred payments could be added on to the principal mortgage amount and could incur additional interest.
Once your payments are resumed, they might increase your regular payment to maintain your existing amortization schedule.
Applying to defer your mortgage payments
If you are in a place where your only option is to defer payments, so you don’t get behind or default on your mortgage, you should contact your lender directly. Should you call and not get through, consider sending an email. Here is a template for you to follow. Edit as required.
Subject: “your name” & “mortgage #”
My name is “your name”. I would like to inquire about mortgage payment relief. My income has been disrupted by the Covid-19 virus, and I have limited means to make upcoming mortgage payments.
My address is “insert address”, and my contact information is “provide the best way to contact you”.
Please advise of the next steps.
“your name.”
Will deferring mortgage payments impact your credit score?
The simple answer is, no. A lender approved deferral is not like missing a mortgage payment. However, if you don’t communicate with your lender and just skip a payment, it could negatively impact your credit score.
Now, the truth is, payment deferral shouldn't impact your credit score, BUT, in these unprecedented times, and with the overwhelming number of deferral applications and banks having never handled anything like this before, it wouldn’t be a big stretch to imagine that mistakes could be made. Misinformation could get misreported to the credit bureaus.
Other mortgage options
Payment deferral isn’t the only option you have at this time. You may qualify for any of the following:
A mortgage refinance
Restoration of your original amortization (to lower your payment)
Hold a payment (during a temporary suspension of income)
Negotiated reduction of payments
If you are in a place where the Covid-19 has financially impacted you, and you need someone to discuss all your options - including deferring payments, please contact us anytime.
Let's discuss your financial situation and work together on a plan to get you through this!
604-862-8080
info@oakandprime.ca
RECENT POSTS
If you’re looking to do some home renovations but don’t have all the cash up front to pay for materials and contractors, here are a few ways to use mortgage financing to bring everything together. Existing Home Owners - Mortgage Refinance Probably the most straightforward solution, if you’re an existing homeowner, would be to access home equity through a mortgage refinance. Depending on the terms of your existing mortgage, a mid-term mortgage refinance might make good financial sense; there’s even a chance of lowering your overall cost of borrowing while adding the cost of the renovations to your mortgage. As your financial situation is unique, it never hurts to have the conversation, run the numbers, and look at your options. Let’s talk! If you're not in a huge rush, it might be worth waiting until your existing term is up for renewal. This is a great time to refinance as you won’t incur a penalty to break your existing mortgage. Now, regardless of when you refinance, mid-term or at renewal, you’re able to access up to 80% of the appraised value of your home, assuming you qualify for the increased mortgage amount. Home Equity Line of Credit Instead of talking with a bank about an unsecured line of credit, if you have significant home equity, a home equity line of credit (HELOC) could be a better option for you. An unsecured line of credit usually comes with a pretty high rate. In contrast, a HELOC uses your home as collateral, allowing the lender to give you considerably more favourable terms. There are several different ways to use a HELOC, so if you’d like to talk more about what this could look like for you, connect anytime! Buying a Property - Purchase Plus Improvements If you’re looking to purchase a property that could use some work, some lenders will allow you to add extra money to your mortgage to cover the cost of renovations. This is called a purchase plus improvements. The key thing to keep in mind is that the renovations must increase the value of the property. There is a process to follow and a lot of details to go over, but we can do this together. So if you’d like to discuss using your mortgage to cover the cost of renovating your home, please connect anytime!
As patios wind down and pumpkin spice ramps up, fall is the perfect reset for your home—and your homeowner game plan. These quick wins boost comfort, curb appeal, and efficiency now, and set you up for a low-stress winter (and a strong spring market). 1) Safety & “silent leak” checks (Weekend-ready) Clean gutters & downspouts. Add leaf guards where trees overhang. Roof scan. Look for lifted shingles, cracked flashings, or moss. Seal the shell. Re-caulk window/door trim; replace weatherstripping. Test alarms. New batteries for smoke/CO detectors; add one near bedrooms. Why it matters: Prevent water intrusion and heat loss before storms roll in. 2) Heat smarter, not harder Furnace/boiler tune-up and filter change. Smart thermostat with schedules and geofencing. Draft hunt. Foam gaskets behind outlets, door sweeps on exterior doors. ROI tip: Efficiency upgrades lower monthly bills and can improve lender ratios if you’re eyeing a refinance later. 3) Fall-proof your yard (so spring you says “thanks”) Aerate + overseed + fall fertilize for thicker turf next year. Trim trees/shrubs away from siding and power lines. Mulch perennials and plant spring bulbs now. Shut off/bleed exterior taps and store hoses to avoid burst pipes. 4) Extend outdoor season (cozy edition) Portable fire pit or propane heater + layered blankets. Path/step lighting for darker evenings (solar or low-voltage). Weather-resistant storage for cushions/tools to preserve value. Neighborhood curb appeal: Warm lighting and tidy beds make a big first impression if you list in shoulder season. 5) Water management = winter peace of mind Re-grade low spots and add downspout extensions (2–3+ metres). Check sump pump (and backup). Look for efflorescence or damp corners in the basement. 6) Mini-renos that punch above their weight Entry/mudroom upgrade: hooks, bench, boot trays, closed storage. Laundry room tune-up: counter over machines, sorting bins, task lighting. Kitchen refresh: new hardware, tap, and under-cabinet lighting in one afternoon. Budget guide: Many of these land under a micro-reno budget—perfect for a modest line of credit. 7) Indoor air quality tune-up Deep clean vents and dryers (including the rigid duct). Add door mats (exterior + interior) to catch grit/salt. Houseplants or HEPA purifier for closed-window months. Fast Timeline (pin this to the fridge) Late August–September Gutters/downspouts, roof/caulking, HVAC service, lawn care, plant bulbs, exterior tap shut-off plan, path lighting. October Weatherstripping/sweeps, fire pit setup, organize mudroom/garage, test alarms, sump check, downspout extensions, dryer vent cleaning. Financing smarter: make your mortgage work for your home Annual mortgage check-in. As rates, income, and goals evolve, a quick review can free up cash flow or open options for a small fall project budget. HELOC vs. top-up refinance. For bite-size projects, a HELOC can be flexible. For bigger renos you plan to pay down, a top-up refi might make more sense. Bundle & prioritize. Knock out the high-impact, low-cost items first (air sealing, safety, water management) before the cosmetic upgrades. Not sure which route fits your fall plans? We’ll run the numbers and map the best financing path for your specific budget and goals. Quick Checklist (copy/paste) ☐ Clean gutters/downspouts; add guards ☐ Roof & flashing visual check ☐ Re-caulk, weatherstrip, add door sweeps ☐ HVAC service + new filter ☐ Aerate/overseed/fertilize; trim trees; plant bulbs ☐ Path & entry lighting ☐ Drain/bleed outdoor taps; store hoses ☐ Downspout extensions; sump test ☐ Dryer vent cleaning ☐ Mudroom/garage organization ☐ Schedule mortgage review / discuss HELOC vs refi Ready to make fall your low-stress season? Book a quick fall mortgage check-up—15 minutes to see if a small credit line or a tweak to your current mortgage could cover your priority projects without straining cash flow.
