Deferring Mortgage Payments. (Covid-19)
Jen & Cory • March 23, 2020
In response to the Covid-19 crisis; for those individuals financially affected, banks and the government have announced that payment relief may be available for up to 6 months of deferred mortgage payments.
As information is changing daily, or hourly, if you have any questions, please contact us directly to discuss your financial situation. The following information is a general guideline, each lender deals with things a little differently. So, here’s what you need to know.
Do you qualify for deferred payments?
Just because lenders are offering deferred mortgage payments, doesn’t mean you will qualify. Lenders are looking at each case individually and will only offer deferral upon their sole discretion. If you haven’t experienced income disruption, you won’t be eligible for payment deferral.
To qualify, you will have to prove not only that you have been directly financially impacted by Covid-19, but that you have no other means of making your mortgage payments. In other words, you have to prove genuine financial hardship.
Before making an application to your lender for deferred payments, you should consider applying for EI and continue making your payments as scheduled. Good advice is only to contact your lender if you have an immediate need and you would otherwise default on your payments.
Deferred doesn’t mean free
To be clear, deferred does not mean free. If you defer your payments for up to 6 months, you will still be responsible for paying that money to the lender. In fact, at most lenders, deferred payments could be added on to the principal mortgage amount and could incur additional interest.
Once your payments are resumed, they might increase your regular payment to maintain your existing amortization schedule.
Applying to defer your mortgage payments
If you are in a place where your only option is to defer payments, so you don’t get behind or default on your mortgage, you should contact your lender directly. Should you call and not get through, consider sending an email. Here is a template for you to follow. Edit as required.
Subject: “your name” & “mortgage #”
My name is “your name”. I would like to inquire about mortgage payment relief. My income has been disrupted by the Covid-19 virus, and I have limited means to make upcoming mortgage payments.
My address is “insert address”, and my contact information is “provide the best way to contact you”.
Please advise of the next steps.
“your name.”
Will deferring mortgage payments impact your credit score?
The simple answer is, no. A lender approved deferral is not like missing a mortgage payment. However, if you don’t communicate with your lender and just skip a payment, it could negatively impact your credit score.
Now, the truth is, payment deferral shouldn't impact your credit score, BUT, in these unprecedented times, and with the overwhelming number of deferral applications and banks having never handled anything like this before, it wouldn’t be a big stretch to imagine that mistakes could be made. Misinformation could get misreported to the credit bureaus.
Other mortgage options
Payment deferral isn’t the only option you have at this time. You may qualify for any of the following:
A mortgage refinance
Restoration of your original amortization (to lower your payment)
Hold a payment (during a temporary suspension of income)
Negotiated reduction of payments
If you are in a place where the Covid-19 has financially impacted you, and you need someone to discuss all your options - including deferring payments, please contact us anytime.
Let's discuss your financial situation and work together on a plan to get you through this!
Recent Posts
Co-Signing a Mortgage in Canada: Pros, Cons & What to Expect Thinking about co-signing a mortgage? On the surface, it might seem like a simple way to help someone you care about achieve homeownership. But before you sign on the dotted line, it’s important to understand exactly what co-signing means—for them and for you. You’re Fully Responsible When you co-sign, your name is on the mortgage—and that makes you just as responsible as the primary borrower. If payments are missed, the lender won’t only go after them; they’ll come after you too. Missed payments or default can damage your credit score and put your financial health at risk. That’s why trust is key. If you’re going to co-sign, make sure you have a clear picture of the borrower’s ability to manage payments—and consider monitoring the account to protect yourself. You’re Committed Until They Can Stand Alone Co-signing isn’t temporary by default. Even once the initial mortgage term ends, you won’t automatically be removed. The borrower has to re-qualify on their own, and only then can your name be taken off. If they don’t qualify, you stay on the mortgage for another term. Before agreeing, talk openly about expectations: How long might you be on the mortgage? What’s the plan for eventually removing you? Having these conversations upfront prevents surprises later. It Affects Your Own Borrowing Power When lenders calculate your debt service ratios, the co-signed mortgage counts as your debt—even if you never make a payment on it. This could reduce how much you’re able to borrow in the future, whether it’s for your own home, an investment property, or even refinancing. If you see another mortgage in your future, you’ll want to consider how co-signing could limit your options. The Upside: Helping Someone Get Ahead On the positive side, co-signing can be life-changing for the borrower. You could be helping a family member or friend buy their first home, start building equity, or take an important step forward financially. If handled with clear expectations and trust, it can be a meaningful way to support someone you care about. The Bottom Line Co-signing a mortgage comes with both risks and rewards. It’s not a decision to take lightly, but with careful planning, transparency, and professional advice, it can be done responsibly. If you’re considering co-signing—or want to explore safer alternatives—let’s connect. I’d be happy to walk you through what to expect and help you decide if it’s the right move for you.
Bank of Canada maintains policy rate at 2¼%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario January 28, 2026 The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The outlook for the global and Canadian economies is little changed relative to the projection in the October Monetary Policy Report (MPR). However, the outlook is vulnerable to unpredictable US trade policies and geopolitical risks. Economic growth in the United States continues to outpace expectations and is projected to remain solid, driven by AI-related investment and consumer spending. Tariffs are pushing up US inflation, although their effect is expected to fade gradually later this year. In the euro area, growth has been supported by activity in service sectors and will get additional support from fiscal policy. China’s GDP growth is expected to slow gradually, as weakening domestic demand offsets strength in exports. Overall, the Bank expects global growth to average about 3% over the projection horizon. Global financial conditions have remained accommodative overall. Recent weakness in the US dollar has pushed the Canadian dollar above 72 cents, roughly where it had been since the October MPR. Oil prices have been fluctuating in response to geopolitical events and, going forward, are assumed to be slightly below the levels in the October report. US trade restrictions and uncertainty continue to disrupt growth in Canada. After a strong third quarter, GDP growth in the fourth quarter likely stalled. Exports continue to be buffeted by US tariffs, while domestic demand appears to be picking up. Employment has risen in recent months. Still, the unemployment rate remains elevated at 6.8% and relatively few businesses say they plan to hire more workers. Economic growth is projected to be modest in the near term as population growth slows and Canada adjusts to US protectionism. In the projection, consumer spending holds up and business investment strengthens gradually, with fiscal policy providing some support. The Bank projects growth of 1.1% in 2026 and 1.5% in 2027, broadly in line with the October projection. A key source of uncertainty is the upcoming review of the Canada-US-Mexico Agreement. CPI inflation picked up in December to 2.4%, boosted by base-year effects linked to last winter’s GST/HST holiday. Excluding the effect of changes in taxes, inflation has been slowing since September. The Bank’s preferred measures of core inflation have eased from 3% in October to around 2½% in December. Inflation was 2.1% in 2025 and the Bank expects inflation to stay close to the 2% target over the projection period, with trade-related cost pressures offset by excess supply. Monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment. Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today. However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond. The Bank is committed to ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is March 18, 2026. The Bank’s next MPR will be released on April 29, 2026. Read the January 28th, 2026 Monetary Report
