Mortgage deferral FAQs
FAQ – Canada Life homeowner assistance
The term mortgage deferral is used to describe the temporary pause of your mortgage payments to provide short-term relief if you're experiencing financial difficulties. In deferring principal payments on the loan, the interest cost for that payment is capitalized (in other words, added) to the mortgage loan balance creating a new higher balance and an increase in overall interest costs. Deferring payments also means the principle balance will not be reduced by the portion of the unpaid payments that would have been applied towards the principle.
For PIT payments (principal, interest and property tax), the tax portion of the payment may also be added to the mortgage loan. This will be reviewed on a case-by-case basis.
If you have mortgage life insurance, you must continue to make your payments every month to ensure your insurance policy remains in place.
You can utilize increased payment frequency or pre-payment privileges available on some mortgages to help reduce your overall mortgage balance. This will reduce the principle and interest owed over the remaining term of the mortgage. We encourage you to reach out to the Mortgage Contact Centre after your deferral period has ended to explore their options.
Once submitted, you can expect to hear from us within five business days regarding the outcome of your request.
Yes, we’ll continue to make payments to your property tax municipality if you defer the tax portion of your payment. The tax portion of the payment will be added to your mortgage balance.
Credit scores will not be negatively impacted by clients who defer their mortgage payments.
No, you won’t be charged any fees to defer a payment. However, the interest on deferred payments will be capitalized, which means the interest payment amount will be added to your remaining mortgage balance.
We’re assessing each client’s situation on a case-by-case basis. COVID-19 homeowner assistance is available for clients who are experiencing a change in their current financial situation that impacts their ability to make their mortgage payments. Examples of a change in financial situation include, but are not limited to, reduction in income, job loss or unpaid time off, directly caused by COVID-19.
You can request to defer your payments for 1, 2 or 3 months to a maximum total of 6 months when combined with your previous deferrals. The current deferral request period comes to an end on Sept. 30, 2020. If your payment frequency is more often than monthly, you may defer 2 bi-weekly, 2 semi-monthly or 4 weekly payments per month.
Canada Life is committed to working with our valued clients during this difficult time and will continue to support each client as their financial situation may change.
We are currently offering full capitalization of payments only. An interest-only option is currently not available.
We require a minimum of 5 business days’ notice before your next payment date.
To evaluate and process your request for a payment deferral, Canada Life will request personal information, including information about your finances and how COVID-19 is affecting your situation. This information may be retained as long as permitted or required by law. This information may also be shared with other companies associated with Canada Life to evaluate and process your request.