In March 2020, Canada’s six largest banks announced a deferral of mortgage payments to help families hit by COVID-19. They offered to defer up to six mortgage payments, and it was a welcome step in a very hard time.
This post was first published on March 18, 2020. The details below describe the offer as announced then.
Six banks offer a deferral of mortgage payments
The six banks were the Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank. They rose to the occasion in these challenging times.
Each bank offered to defer up to six payments. The goal was to give relief to families whose income COVID-19 had disrupted. For many households, the mortgage is the largest monthly bill. So a pause, even a short one, could free up cash for food, rent, medicine and other basics.
It is in times like these that individuals and institutions come forward to help each other. That spirit was the real story behind the announcement.
How a deferral of mortgage payments works
A deferral is a pause, not a gift. In general, you skip or postpone payments for an agreed period, and then you resume them later. However, interest usually keeps adding up during the pause. That interest is then typically added to what you owe.
So a deferral can ease pressure today, but it may cost more over the life of the loan. The exact terms depend on your lender and your mortgage contract. For that reason, always read the terms in writing before you agree.
For general information on mortgages and homeownership in Canada, the Canada Mortgage and Housing Corporation (CMHC) is a helpful place to start.
Questions to ask your lender first
Before you ask for a deferral of mortgage payments, it helps to prepare. Here are some simple questions to bring to your bank:
- How many payments can I defer, and when do regular payments start again?
- Will interest keep building during the pause, and how will you repay it?
- How will my payment amount or amortization change afterwards?
- Will the deferral affect my credit or my mortgage renewal?
- Are there other options, such as a lower payment for a while?
Also, look at your whole budget, not just the mortgage. Property taxes, insurance and utilities still need attention. Meanwhile, government relief programs may cover part of the gap.
It also helps to write down a simple plan. List your income, your fixed bills and the payments you can pause. Then decide which bills to protect first. Your home, your heat and your food usually come before anything else. Finally, keep every letter and email from your lender, so you have a clear record of what you agreed to.
Protect your family and your neighbours
Money relief matters, yet health matters most. A deferral of mortgage payments can protect your home, while good habits protect the people inside it.
Remember, I may be healthy, but I may still carry the virus to vulnerable family members if I do not follow the guidelines of health practitioners. So please:
- Wash or sanitize your hands.
- Sneeze into your folded arm.
- Do not shake hands or hug.
- Self-isolate if you have a runny nose, a cough or a fever, or if you have returned from a trip outside the country.
Also, take care of your elderly neighbours. For example, help them bring home their groceries or medicines. Prayers for everyone to be safe and back to normal life soon.
Looking back on the 2020 relief
Much has changed since 2020. The pandemic relief programs ended long ago, and interest rates have moved a great deal since then. Still, the lesson holds. If you ever struggle with payments, talk to your lender early, because options shrink when you wait.
Homeowners in Mississauga and across the GTA can also lean on professionals. A mortgage broker, your bank’s advisor or an accountant can explain the trade-offs in plain language. And if selling or downsizing ever becomes the better path, a real estate agent can walk you through your choices without pressure.
A deferral of mortgage payments was one of several relief measures that spring. You can read about how to apply for the federal COVID-19 relief package and my outlook for the GTA market after the pandemic. Global News covered the bank announcement at the time:
Talk to a Mississauga real estate agent
Do you have questions about buying, selling or simply planning your next move in Mississauga or the GTA? I am happy to help, so please send me a message or call me at 416 908 5600. A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage
Disclaimer: this article was published on 18 January 2025 and reflects the information available at that time. Interest rates, prices, and government programs change, so check the current position before acting on anything here. It is provided for information only and is not financial, mortgage, tax or legal advice. A. Q. Mufti is a registered Sales Representative with RE/MAX Real Estate Centre Inc., Brokerage, Ontario, Canada.
