Everything You Need to Know
The COVID-19 situation in Canada is evolving very quickly, resulting in rapid changes to the financial situation and economic outlook for many people. As always, the Auxilium Team is dedicated to staying on top of news related to the mortgage industry to provide you with all of the information you need to make the best decision for your situation. We will update this post as new announcements are made.
Federal Decisions Affecting Mortgages
On March 13, 2020 the federal Department of Finance suspended the coming into force of the new Benchmark Rate for the minimum qualifying rate for insured mortgages until further notice. This coincides with the Office of the Superintendent of Financial Institutions pausing all consultations on regulatory matters, including on the proposed new Benchmark Rate for the minimum qualifying rate for uninsured mortgages.
On March 27, the Bank of Canada unexpectedly lowered the central bank's benchmark interest rate by 50 basis points to 0.25%. The central bank already cut its rate at a previously scheduled meeting on March 4, and during a surprise announcement on March 13. The next scheduled rate decision is set for April 15, at which point the central bank says it will "provide a full update of its outlook for the Canadian and global economies." The greatest impact of these rate cuts will be felt by current variable rate mortgage holders.
On March 16, 2020 Canada Mortgage and Housing Corporation (CMHC) launched a revised Insured Mortgage Purchase Program (IMPP). Under this program, the government will purchase up to $50 billion of insured mortgage pools through CMHC. On March 26, CMHC increased the amount to $150 billion. This action will provide stable funding to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses.
For mortgages insured by CMHC, they are extending the period allowed for a temporary short-term payment deferral to six months. While this means that you may not have to make payments for up to six months, the total amount of time remaining on your mortgage will remain the same. If your mortgage amortization today is 20 years and 3 months, it will still be 20 years and 3 months in September if you qualify for and choose this option.
On March 18, 2020 Canada's six largest banks announced that they will be allowing customers to defer their mortgage payments for up to six months, following the guidelines set out by CMHC. Many other lenders are also offering mortgage forbearance for households facing financial impacts from COVID-19, on a case-by-case basis. You will need to contact your lender directly to make arrangements; a list of customer service phone numbers for mortgage lenders can be found here.
The Auxilium Team is Here for You
Our staff are healthy, working, and ready to support your mortgage needs; as the situation requires it, we have the ability for our team to work from home to safeguard their health and that of their families. We have options for you to:
- consult with a mortgage broker by phone
- complete your mortgage application or refinance remotely
- discuss how the equity in your home can be a part of your ongoing financial plan.
You can read more about our online mortgage process and start your application here.
As the situation develops, we will follow the advice of Public Health Agencies and continue to keep you updated on the best ways to contact us.
If you’d like to book a consultation with one of our mortgage specialists, get in touch with us today by phone at 250-590-6520 (toll-free 1-855-590-6520) or by using our online contact form.
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.