Millions of Canadians already missing payments due to COVID-19

We are still relatively early in the coronavirus crisis but already many people are missin payments.

A new report from insolvency practitioners Bromwich+Smith with Leger Research has found that 49% of households in Ontario and Alberta, and more than half in British Columbians, have suffered an immediate income reduction since the crisis began.

The share of households who reported already falling behind with payments on credit cards, utilities, or telecoms is 24% in Alberta, and 19% in Ontario and BC.

“The results are quite staggering really. Of course, we get a sense of what is happening when we read the news, but the survey results make it far more real having interviewed 750 people across BC, Alberta and Ontario,” says David de Lange, Senior Vice President of Leger Research.

Getting help
Most of those struggling will reach out for help from the federal and provincial governments but almost a quarter of respondents said they didn’t know how they would adjust to a reduction in income.

Bromwich+Smith advises that getting government help is a good first step for those that cannot pay their debts followed by asking their mortgage lender to see if a deferral could work for them or call a licensed insolvency trustee to understand if restructuring debts makes sense for their current state.

COVID-19: Government announces new mortgage buying program

 

 

 

 

 

 

 

 

The Canadian government has announced a further measure to mitigate the impact of the COVID-19 crisis and to help maintain stability in the financial system.

It will launch a revised Insured Mortgage Purchase Program (IMPP) which will see up to $50 billion of insured mortgage pools purchased through the Canada Mortgage and Housing Corporation (CMHC).

It means that banks and mortgage lenders will have stable funding to continue to lend to consumers and businesses.

The government highlights that this does not pose additional risk to taxpayers as the insured mortgages being purchased are already backed by the government.

“These events remind us all how crucial it is to have a safe and affordable place to live. CMHC exists in part to buffer the effects of events such as the COVID-19 virus pandemic, which affect the health and stability of Canada’s financial system. This is what we do. We are part of a federal team that is working hard together to ease the impacts on Canadians,” said Evan Siddall, president and CEO of CMHC.

Earlier this week, the Office of the Superintendent of Financial Institutions (OSFI) announced measures to shore up finances of the institutions it regulates and the suspension of the planned changes to the mortgage stress test.’

CMHC

@CMHC_ca

We’re taking measures to help the during . Through an Insured Mortgage Purchase Program, the will buy up to $50B of insured mortgage pools to help lenders. Details: http://ow.ly/MsWa50yNcqD 

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Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Market update:

Big Six banks to allow 6-month mortgage payment deferral

 

 

 

 

 

 

 

 

Canada’s largest banks are coordinating their approach to the COVID-19 coronavirus outbreak to protect their employees and customers.

Measures to support both health and finances will have some common elements across the ‘Big Six’ banks – RBC, CIBC, TD, Scotiabank, BMO, and National Bank of Canada, the Canadian Bankers Association said.

Financial support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.

Individual Canadians or business owners facing hardship are encouraged to contact their bank directly to discuss options that could be available to them.

In keeping with advice from Canada’s public health authorities, the response is also designed to support social distancing to control the virus’ spread.

That means that branches will be closed or operate with reduced hours, while special care will be taken with those branches in rural communities.

Critical services will be maintained and many banking services will continue to be available through ABMs, mobile apps, bank websites and telephone banking.

Banks will be communicating with customers to explain the measures they are taking.

Canada’s banks are being supported by a reduction in the stability buffer required for a ‘rainy day’ and by other measures taken by the federal government and Bank of Canada in expectation of a potentially-prolonged downturn.

With interest rates currently at 0.75%, there is room for the BoC to make further reductions in line with some other major economies. The Fed cut its overnight rate to a range of 0% to 0.25% on March 15.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Market update:

Home sales poised to moderate

 

 

 

 

 

 

 

 

The COVID-19 outbreak will likely moderate house sales in the near term, according to an economist.

Brian DePratto, senior economist at TD Bank, said the current market conditions due to the impact of the coronavirus paint a bleak picture for home sales in the next months.

“That said, sales are well-positioned to make a strong recovery once the impact of the virus dissipates, helped by an ultra-low interest rate environment,” he said in a report in The Canadian Press.

DePratto said the recovery in sales once the concerns surrounding the COVID-19 ease will likely translate to price gains.

Home sales increased by 26.9% annually in February. On a monthly basis, sales were up by 5.9%, driven by the strong turnout in the Greater Toronto Area (GTA). This came with a 7.3% growth in new listings.

The healthy sales activity and the gains in listings came with a 15.2% annual growth in the national average price for homes, which now stands at $540,000. Excluding the major markets of Greater Vancouver and GTA, the national average price during the month grew by 10.5% to $410,000.