Mortgage Broker Simon Wong from Dominion Lending Has kindly provided the following information. I hope you find it helpful.
I hope you are doing well during this pandemic and adjusting to self-isolation. As you may know, over 500,000 requests for mortgage deferrals or skip a payment have already been completed or are in process since Canada’s banks announced a mortgage deferral program over three weeks ago. Taken together, the country’s six largest banks have deferred more than 10% of the mortgages in their portfolio.
So how does this work? A mortgage deferral is an agreement between you and your lender that you will suspend your mortgage payments for an agreed-on, temporary amount of time. Remember that the total amount owing on your mortgage will be higher, due to the interest that has accrued. The added interest is incorporated into the monthly payment, either when payments resume at the end of the deferral period or upon renewal at the end of the mortgage’s term (this will depend on your lender’s policy).
We have developed a simple “Deferral Payment Calculator” (using Excel) to help calculate the increased mortgage payments. The calculation tool assumes that the mortgage payment is adjusted (increased) at the end of the deferral period and the new payment after deferral is calculated over the remaining amortization period. No extension to the amortization period based on the months of deferral.
To download this tool please click on the icons below. Please follow the instructions listed in the “User Notes” and choose the correct tool/calculator. We also included a “COVID-19 Mortgage Resource Guide” which has information on how each lender and mortgage insurer are responding during this pandemic. Feel free to contact me any time if you have any questions or concerns. Thank you again and stay safe.