Governmental Initiatives to Help Home Owners, Renters, and Potential Home Buyers During the COVID-19 Crisis
The COVID-19 crisis has resulted in numerous business closures, job losses, lay-offs, and tough economic times for many. Here are some of the governmental initiatives that have been announced to help home owners, renters, and potential home buyers during these unprecedented times.
For Home Owners: Mortgage Payment Deferrals for Up to 6 Months
The Canada Mortgage and Housing Corporation (CMHC), which provides default insurance for insured loans, has announced that it will allow home owners who have insured mortgages to defer mortgage payments for up to six months. Canada’s 6 big banks (TD, CIBC, RBC, BMO, Scotiabank, and National Bank of Canada) have also announced that mortgage payment deferral will be granted on a case-by-case basis to assist those disrupted by the COVID-19 pandemic.
Mortgage deferral can help if you are struggling to make mortgage payments by allowing you to skip a payment for up to six months. However, it does not cancel or eliminate the amount owed on the mortgage. You will need to resume payment according to your regular payment schedule at the end of the agreed-upon deferral period, including both principal and accrued interest. Note that the interest accumulated during the deferral period gets added to the outstanding principal of your mortgage.
For Home Renters: Potential Rent Freezes (Case-by-Case Basis) and Eviction Deferrals
For those who require rent payment freezes or deferrals, it is advisable to speak to your landlord to discuss arrangement. Ontario Premier Doug Ford’s Progressive Conservative government has said no new eviction orders will be issued until further notice amid the COVID-19 pandemic.
For Potential Home Buyers: Lower Mortgage Interest Rate
The Bank of Canada has lowered overnight prime lending rate / interest rate for the second time in March 2020, dropping it from 1.75% to 1.25% to 0.75%. This rate cut is in line with the United States’ Federal Reserve’s drop in its interest rate. The main purpose is to inject liquidity into the markets and stimulate the economy.
This rate cut means lower mortgage rates, which could fuel real estate demand in a market that is already relatively low in inventory supply. The central bank says that it is providing economic support to the economy amid the COVID-19 pandemic.
If you have questions about mortgages or home buying and selling, feel free to reach out to us any time. We’d be happy to answer any questions you have.
Change in Utility Rate Billing by Utilities Companies
In response to the COVID-19 pandemic, the Government of Ontario issued an Emergency Order under the Emergency Management and Civil Protection Act. Starting on March 24, 2020, residential customers on “time of use” pricing will pay the “off-peak rate” of 10.1 ¢/kWh no matter what time of day the electricity is consumed. This is a welcomed change, as many are now working from home and consuming electricity during the period of day that would otherwise be considered “on-peak rate”. As of late March 2020, this all-day, off-peak pricing would remain in effect for 45 days.