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Mortgage Deferrals and COVID 19

CoryVance • March 21, 2020

One week into “quasi” lockdown and it certainly has been an interesting one. It is hard to know where to start so I will start with a THANK YOU and a sincere appreciation for all health care professionals and first responders. We are all thankful for all that you do.

To sum up this week in the world of mortgages is probably tough to do in a weekly blog and I probably should be doing daily ones right now, but with everyone stuck at home social distancing, I’m working on keeping sane. The top requested item this week is mortgage deferrals.

The government and CMHC being proactive on behalf of all banks and lenders said there would be solutions for Canadians impacted by COVID-19. They would be offering up to 6 months of payment deferrals on insured mortgages. This announcement, made March 13, seemed to be without any consultation or coordination with any lenders, which I guess can be expected during times like this where things are evolving minute by minute. Here was the original announcement:

I certainly do not disagree with the intention, but the execution has become nothing short of a debacle which has led to further panic and some people waiting on hold for up to 3 hours to get through to their lenders. All Mortgage Lenders including the Big 6 banks quickly responded with a coordinated effort and made a joint declaration earlier this week to support these payment deferrals. I think all parties woefully underestimated the impact of this announcement and lenders have now been hit with call volumes that have in some cases gone from the 600 calls per day to 3200 calls per day and one major lender had received over 24,000 email requests requesting information on payment deferrals in one day. The sheer magnitude of requests is staggering and causing a drag on all financial services companies and mortgage lenders. This at a time when mortgage application volumes have risen quickly.

I will try to do my part and shed some light on things we should be thinking about prior to requesting these now-infamous payment deferrals. First, let me start with the fact that there should be an immediate need or impending need. The stories are beginning to mount and we all either know someone that has been laid off or directly impacted by COVID-19 or you have been impacted. This is becoming the true financial tragedy of this pandemic. For those people, there is a potential immediate need which was the intention of the programs. For those still working and have emergency funds set aside today this would not be considered the target of this program.

Understanding things can change, but from what I have heard from lenders they are now trying to triage requests into an immediate need which would be those who have been adversely impacted and have mortgage payments coming out now or next week. The next tier would be those who have payments in the coming weeks or months and who have lost jobs or been laid off or impacted by COVID 19.

The next point would be these are payment deferrals. This means lenders are putting your payments on hold, they are not waived or disappearing. So in extreme cases, there can be up to 6 months, but please be clear these mortgage payments are not disappearing, they are just being put on hold or deferred. The financial costs to delaying these payments and having interest compounded can be very expensive when looked at over the term of a mortgage or the life of a mortgage. I will not go into detail on the actual costs, suffice to say if you do not have income coming in and you have depleted your savings this is one of the ONLY options and should be considered to help bridge the gap and help maintain your credit history. Please reach out to me directly if you have a situation and I can offer some guidance or solutions prior to calling your lenders who have now become overrun with all inquires. I can be reached at cory@coryvance.ca.

Please also keep in mind the intent of this program is to help in cases of hardship and you may be asked some qualifying questions so the lender can assess or show need. It is also important to understand how the payment deferral will work. Will it be delayed until the end of your mortgage term and impact your ability to switch or move your mortgage at the renewal date? The other big thing to consider is for those who have switched or got new mortgages in the past year. There may not be equity built up in the property yet and each lender may have to take that into consideration when assessing if they can defer payments. Once again I know I am posing more questions than answers, but with many different lenders involved each will have their own way of assessing the request much the same as each lender assesses new mortgages differently. All lenders continue to stress things will be looked at on a case by case basis.

Once again I would encourage anyone who is impacted at any level or those that may be impacted to contact me so we can have a conversation to assess some of your options. I can be reached at cory@coryvance.ca and over the next little while this will be the best way to reach me and I can follow up to schedule a call to discuss further.

On another note in mortgages and this may take most by surprise, but mortgage rates are GOING UP. Now you are saying Cory what are you talking about, the Bank of Canada just lowered rates last week. Yes, but once again in my last post on Friday, March 13 we had started to see bond yields increasing which means fixed mortgage rates would trend higher. Well, that trend continued this week and bond yields were up almost .50% this week from the all-time lows. SEE CHART showing the 5 year Government of Canada bond yields from the Bank of Canada website.

Expect to see fixed mortgage rates in the higher 2.00% range and moving above 3.00% soon.

This is not surprising because we knew all-time low rates would be short-lived and they would come up even quicker than they have come down. However, the other factor which is impacting rates, even more, is the liquidity and risk pricing that has started to skyrocket. This is when banks do not want to lend to each other, to businesses or even consumers because of the increased risk of not being paid back. This is the same as what we saw in Fall 2008 and Spring 2009 during the financial meltdown. We have now started to see variable-rate mortgages remove their discounts. So there is no more prime – 1.00% discounts on variable mortgages. These discounts with some lenders have gone down to prime or prime + .10%. The prime rate is currently 2.95% after we saw decreases of 1.00% this month and we may see further decreases. So for those with current variable discounts prime – .50% or more you should be well-positioned as we look to whether the pending storm.

At this point, I am going to stop and once again encourage any past clients or new clients to reach out so we can discuss your situation. These are challenging times for all of us and I can assure you there is no judgment on situations that have spiralled beyond your control. However the sooner we can take action the better, instead of waiting until some of your options disappear.

This brings me to one final comment on additional measures introduced under the government’s $82 billion aid plan this week which can be found here

I would encourage any that have been impacted to start the search here because you may qualify for some additional funds directly from the government which could help to make those mortgage payments before you think about deferring payments.

Stay well.
Cory

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From Summer Shine to Fall Fine: Smart Home Projects to Tackle Before the First Frost

By Cory Vance • August 28, 2025
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.

What Banks Won’t Tell You About Mortgage Financing

By Cory Vance • August 26, 2025
If you’re looking to buy a property or have a mortgage up for renewal, and you’re thinking about connecting with your bank directly, save yourself a lot of money and regret by reading this article first. Here are four things that your bank won’t tell you, accompanied by four reasons that explain why working with an independent mortgage professional is in your best interest. Banks have Limited Access to Mortgage Products. Now, while this one may seem pretty straightforward, if you’re dealing with a single institution, they can only offer mortgages from their product catalogue. This means that you’ll be restricted to their qualifications which are usually very narrow. Working with a single institution significantly limits your options, especially if your financial situation isn’t straightforward. In contrast, dealing with an independent mortgage professional, you will have access to products from over 200 lenders, including banks, monoline lenders, credit unions, finance companies, alternative lenders, institutional B lenders, Mortgage Investment Corporations, and private funds. Working with an independent mortgage professional will give you considerably more options to secure a better mortgage. Banks Employ Salespeople, not Mortgage Experts. Banks don’t employ mortgage experts; they employ salespeople. Banks pay and incentivize salespeople to sell their products. There is a fundamental misalignment of values here. If the bank incentivizes a banker to make a profit for the bank, how can they at the same time advocate for you and your best interest? They can’t. Banks don’t have your best interest in mind. In fact, the more money they make off of you, the better it is for their bottom line. However, when you work with an independent mortgage professional, you get the experience of someone who understands the intricacies of mortgage financing and will advocate on your behalf to get you the best mortgage. It’s actually in our best interest to assist you in finding the mortgage with the best terms for you. Once your mortgage completes, we get paid a standardized finder’s fee by the lender for arranging the financing. So although we get paid by the lender, that lender has had to compete with other lenders to earn your business. When you work with an independent mortgage professional, everyone wins. You get the best mortgage available, we get paid a standardized finder’s fee, and the lender gets a new borrower. Banks Rarely Offer You Their Best Terms Upfront. Banks are in the business of making money, and they’re usually pretty good at it. As such, banks will rarely offer you their best terms at the outset of your negotiation. This is especially true if you’re looking to refinance your existing mortgage. With over half of Canadians simply accepting the renewal offer they get sent in the mail without question, banks don’t have to put their best rate forward. Instead, they rely on you to be ignorant of the process and will take advantage of your trust in them. When you work with an independent mortgage professional, we don’t play games with rates and terms. Our goal is always to seek out the lender who has the best mortgage for you from the start of the process, and if there are any negotiations to be had, we handle them for you. There is no reason for us to do otherwise. In fact, the better we do our job, the more likely it is that you’ll be happy with our services and refer your friends and family. Banks Promote Restrictive Mortgage Products. As if it’s not bad enough that banks don’t offer their best terms upfront, they actually promote mortgage products that are restrictive in nature. The fine print in your mortgage contract matters; understanding it is challenging. Banks do what they can to make it hard for you to leave. Now, if you’ve ever heard stories of outrageous penalties being charged, this is what’s called an Interest Rate Differential penalty (IRD). Each lender has its own way of calculating the IRD. Chartered banks are known for their restrictive mortgages and high IRD penalties. When you work with an independent mortgage professional, we take the time to listen to your goals and assess your mortgage needs based on your life circumstances. The best mortgage is the one that lowers your overall cost of borrowing. So not only will we walk through the cost of the mortgage financing, but we’ll also clearly outline the costs incurred should you need to break your mortgage before the end of your term. This might be the deciding factor in choosing the right lender and mortgage for you. Working with an Independent Mortgage Professional is in Your Best Interest. Banks have limitations to the mortgage products they offer. Working with an independent mortgage professional gives you mortgage options! Bankers work for the bank; they are incentivized to make money for the bank. An independent mortgage professional advocates on your behalf to get you the best mortgage available. Banks rarely offer their best terms upfront; they leave negotiations up to you. An independent mortgage professional outlines the best terms from multiple lenders at the start of the process. Banks promote restrictive mortgage products that make it difficult to leave them. An independent mortgage broker will outline all the costs associated with different mortgage products and recommend the mortgage best suited for your needs. So if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime. It would be a pleasure to work with you.

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