Covid-19 Managing Uncharted Waters
March 23, 2020 | Posted by: Harold Hagen
Covid-19 Managing Uncharted Waters
As the current health crisis plays out, the months ahead may potentially prove to be trying times. For people with debt, and in particular mortgage debt, money could get tight.
Employment losses are accumulating at an unprecedented rate. In just 4 days last week, Canada recorded 500,000 new jobless claims, or 2.5% of the workforce. It is anticipated that hundreds of thousands of additional layoffs are on the way as industries across the country announce continued cutbacks and shutdowns.
Borrowers are concerned, and our government is stepping forward with solutions. Initiatives have been taken to protect borrowers, businesses, employees, and the overall economy. Ottawa has an $82 billion aid plan and the Bank of Canada has slashed its trendsetting interest rate. The Central Bank is also buying $50 billion in insured mortgage debt in order to give lenders more options.
Recent announcements by the Ministry of Finance, the Bank of Canada, and OSFI:
- Minister Morneau announced a new Business Credit Availability Program, adding $10 Billion of financing, through Business Development Bank of Canada and Export Development Canada, to support Canadian Businesses. Click here or more.
- The Bank of Canada lowered the overnight rate from 125 to 75 bps, to reduce the interest cost burden for businesses and consumers alike. The bank also increased its Government of Canada bond buyback program. Click here for more.
- OSFI reduced the Domestic Stability Buffer from 2.25% to 1%, thereby freeing up $300 Billion additional lending capacity for Domestic Systemically Important Banks (D-SIBS). Click here for more.
Homeowners Mortgage Help:
The COVID-19 outbreak is taking a toll on families across the country with many homeowners out of work and/or quarantined. As an industry built on homeowners, many of our major lenders have pulled together to provide beneficial options and help alleviate some of Canada’s household financial stress.
Depending on your lender, options potentially available to you include:
- Deferral of payments
- Re-amortization of the loan
- Capitalization of outstanding interest & costs
- Special payment arrangements
For their part, mortgage lenders have pledged to work with borrowers. If you have questions, contact your lender directly to see how they can assist you. Email is most recommended as phone wait times are very long currently, and our Lenders have confirmed that emails are the most effective communication method at this time.
Here are dedicated Covid-19 pages for various Lenders:
- Scotiabank: We stand ready to support you
- TD Canada Trust: An update on Covid-19
- B2B Bank: COVID-19 – We stand prepared and ready to help
- CMLS Financial: COVID-19 Update
- Equitable Bank: COVID-19 – we’re here to help
- First National: Keeping you informed: COVID-19
- Haventree Bank: COVID-19: We are here for you when your world turns upside down
- Home Trust: Statement from Home Trust on COVID-19
- HomeEquity: HomeEquity Bank Communication – COVID-19
- Manulife Bank: A message regarding Novel Coronavirus (COVID-19)
Covid-19 Self-Assessment Information:
The Province of Alberta has provided a dedicated page with important COVID-19 information including how to do a self-assessment for symptoms. For Alberta residents, click here.
Stay safe for you, your family and your fellow Canadians. We’re all in this together!