Canada

Canadian Banks Still Have Over 254,000 Mortgages On Payment Deferral

Hundreds of thousands of Canadians are seeing their payment deferrals expire. Canadian Bankers Association (CBA) data shows over half of people on deferrals have resumed payments by September 30. While most have resumed, there’s still hundreds of thousands of mortgages that haven’t yet.

Mortgage Payment Deferrals

When the pandemic kicked off, Canada’s bank regulators allowed “special treatment” of mortgages. Starting in April, regulators allowed mortgages to be treated as still performing, even if they weren’t being paid. This allowed banks to hand out payment deferrals for up to 6 months.  Obviously, banks handed out the deferrals to people, regardless of need. The program ended in September, and now existing borrowers are just wrapping up.

Over 17,000 New Mortgages Were Deferred In September

The final numbers for how many people used the program shows it was massive. There were 795,000 mortgages at just 8 banks at the end of the September, up 2.19% from a month before. This means another 17,000 people signed up for the program in September. It works out to 16% of mortgages. The end of September was the last month to sign up, so that wraps up the peak of users. 

Canadian Mortgage Payment Deferrals

The rate of mortgages on payment deferral in Canada, at the 8 largest CBA member banks.

Source: Canadian Bankers Association, Better Dwelling.

About 63% of Borrowers Are Paying Again

Most users have now returned to their regular payments, or their deferrals expired. There were 498,000 mortgages that returned to regular payments in September. This represents 63% of the total deferred, and is up sharply from the 254,000 people at the end of August. If people were to default after payment referrals expiring, it would be too soon to observe right now.

About 297,000 Canadian Mortgages Still On Deferral

There’s still a significant number of mortgages on payment deferral in Canada. At the end of September, 5.97% of mortgages at member banks were still on payment deferral. This is a sharp decline from 10.78% in August. However, 297,000 mortgages still on payment deferral is nothing to sneeze at.

Most people have resumed their mortgage payments, but that doesn’t mean it’s clear. In the event people that resumed their payment schedule aren’t able to pay, the issue won’t show up for a few months. Further, while new payment deferrals have ended, all won’t be over until March or April of next year.

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10 Comments

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  • Patrick 3 weeks ago

    They gave everyone the deferrals regardless of need, because it means they were racking up more interest. Let’s not be naive. haha.

    • SH 3 weeks ago

      The banks had no choice. The government forced them. So deadbeat mortgage borrowers got a 6-month holiday from their financial obligations while renters got zilch.

      • C.D.R. 3 weeks ago

        @SH, they were deferrals, NOT FORGIVENESS, SO NOT FREE.

        The deferred mortgage payments were amortized over the remaining term of the mortgage.
        If the mortgage has a 5 yr. term and 2 years are remaining, then the deferred mortgage payments not collect are now spread through those remaining 2 yrs.

        PLEASE learn something before you post the same BS every time.

  • Amanda 3 weeks ago

    What happens to mortgage in this case? Is just extended?

    • Mortgage Guy 3 weeks ago

      Most spread the payment across the remainder of the term. Depends on how long you have on your term though.

    • straw walker 3 weeks ago

      The deferred mortgage payment is then ammonized over the remaining term of the mortgage.
      If your mortgage has a 5 yr. term and 3 years are remaining then the deferred mortgage payment not collect are now spread through those remaining 3 yrs.

  • straw walker 3 weeks ago

    The numbers of deferrals varies from city to city
    Edmonton has a 21% of all mortgages in deferral

    • Mike 3 weeks ago

      How do you find deferrals per city? It would be interesting to see the differences.

      • The Truth Shall Set You Free 3 weeks ago

        There is no way to know for sure but Straw is going off percentages provided in a previous article written on Better Dwelling. That article mentioned Toronto’s deferrals at 12%. I suspect is higher though….although I am certain the average mortgage value in Edmonton is on the lower end due to home values being less. The average mortgage here in the GTA I have been told is 600k so 12% of mortgage deferrals at 600k is significantly more than 21% @ 200k.

  • sjin 3 weeks ago

    Vancouver – 11%
    Kelowna – 12%
    Calgary – 18%
    Edmonton – 21%
    Regina/Saskatoon – 14/15%
    Winnipeg – 11%
    Toronto – 12%
    Ottawa – 7%
    Montreal – 10%
    Quebec City – 7%
    Halifax – 10%
    St John’s – 14%

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