The ramifications of COVID-19 seem to get more unbelievable each day. Case in point: tonight's news from Canada's major banks.
In a press release issued late Tuesday, Royal Bank, Bank of Montreal, Scotiabank, TD Bank, CIBC and National Bank of Canada said they will work together to support clients facing financial difficulties due to the COVID-19 pandemic. That includes offering mortgage payment deferrals of up to six months and relief on other credit products.
"These measures are an important first step and underscore the resilience of Canada’s financial system and the strength of our major banks," the banks noted in the release. "Banks will monitor evolving economic conditions and consider other measures if necessary."
So, it appears the country's top 6 lenders have stepped up to the plate for customers. And it's wise they did.
With 11-26 million out of 37.6 million people at risk of catching the virus, say officials, there will be up to 1 million+ out of work, estimates National Bank. To put that in perspective, on a normal month we'd gain just 10,000 to 20,000 jobs. Many of that ~1 million would be unable to pay their mortgage.
In response, payment holidays are far better than outright mortgage defaults. The latter can spiral and take the whole economy down.
Here's a sampling of what individual lenders are offering mortgage clients to battle coronavirus...
RBC Royal Bank
Clients of RBC who are affected by the COVID-19 pandemic can reach out to the bank for solutions that are “tailor-suited” to their needs, the bank tells us.
“The events surrounding COVID-19 are truly unprecedented and we understand how much they are disrupting the daily lives of Canadians,” a spokesperson told Rates.ca. “RBC clients who may experience financial hardship as a result of COVID-19 should know that financial relief programs are being put into place.”
Initiatives include certain fee waivers and reversals and short-term payment deferrals on mortgages, personal loans and credit cards. Small business and commercial clients will also be afforded special consideration through their RBC account managers.
“This situation is rapidly evolving and the number one priority for all Canadians needs to be taking care of their health and well-being,” the spokesperson added. “As more information becomes available about financial relief programs, we will update our clients.”
More info: https://www.rbc.com/covid-19/index.html
BMO Bank of Montreal
BMO has confirmed that clients facing challenges meeting their mortgage obligation due to COVID-19 are encouraged to contact the bank for a review of their financial situation.
“BMO is committed to standing by our customers in both good times and in difficult ones,” a spokesperson told Rates.ca. “We are offering these individuals a financial relief program that is tailored to each individual’s circumstances and needs, which could include deferral of payments on mortgages.”
More info: bmo.com/covid19
National Bank of Canada
National Bank confirmed to Rates.ca that some relief measures are available to clients affected by COVID-19, including deferred payments on their mortgage loans. A spokesperson said clients’ needs will be analyzed on a case-by-case basis, and that relief measures will be subject to adjustments based on forthcoming government aid programs.
More info: 1-888-835-6281 or https://www.nbc.ca/personal/notice.html
“If you are directly impacted by COVID-19 and as a result are facing financial challenges, let us know by reaching out to us at 1-888-720-0075. We are prepared to help you find a solution to meet your needs. You'll have a lot on your mind, and we want to be there for you.”
“Should you be impacted by COVID-19 and need assistance, or if you have questions or concerns about your Scotiabank accounts, products, or services, we offer support through a variety of channels.”
“If you are directly impacted by COVID-19 and as a result are facing financial challenges, let us know by reaching out to us at 1-888-310-4722. We are prepared to help you identify solutions that meet your needs.”
MCAP, a major non-bank mortgage lender, reminds clients of the existing flexibility available to them.
“Given recent global events, MCAP understands that these may be difficult times for its homeowners,” MCAP posted on its website. “In order to provide some assistance, MCAP wishes to highlight that under the terms of your mortgage, you may skip a payment or hold a payment at any time subject to certain conditions.”
Under the skip-a-payment program, borrowers may opt to skip one month’s payment at any time. For those facing lengthier impacts, the Hold a Payment program allows payments to be deferred for a specified period of time.
“Should you elect to skip or hold a payment, MCAP will waive any applicable fees and this will not impact your credit rating,” the lender added.