$1 billion per month. That’s the amount of mortgage payments that Canadians have been postponing since the height of the pandemic.
This calculation was published by the Canada Mortgage and Housing Corporation (CMHC) Thursday, and it assumes an average monthly mortgage payment of $1,333.
“This significantly reduces the influx of payments toward outstanding mortgage debt and is expected to contribute to increasing the total mortgage debt” through September, noted CMHC in its latest Residential Mortgage Industry report.
Not only will the amount of outstanding mortgage debt rise this year due to deferrals, but fewer borrowers will make extra mortgage payments (a.k.a., prepayments) this year.
Just one in five mortgage borrowers plans to make additional payments on their mortgage balance in 2020, according to the Financial Industry Research Monitor (FIRM). That’s down from 2019 when two-thirds of mortgage borrowers expressed an intention to make extra payments in 2020.
At least 760,000 Canadians have applied for mortgage payment deferrals from a chartered bank since the start of the pandemic. But, many more who applied were turned down. And that rubbed a lot of those people the wrong way.
As a result, “Twenty percent of consumers suggested they might be looking at switching lending institutions depending on whether their lender approved mortgage relief measures and how they dealt with accommodations during the crisis,” CMHC noted, citing data from Altus Group’s FIRM Residential Mortgage Survey.
Below are additional tidbits of interest from CMHC’s report: