Alberta records highest number of mortgage deferrals in the country

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Alberta records highest number of mortgage deferrals in the country
WATCH: Nearly one in five mortgages in Alberta was deferred, according to the most recent CMHC figures. Carolyn Kury de Castillo has more on what happens now that the six-month deferral program is coming to a close. – Oct 12, 2020

Alberta has the highest rate of mortgage deferrals in Canada, according to recent numbers from the Canada Mortgage and Housing Corporation.

Back in April, Canada’s big banks announced mortgage deferral programs that would allow borrowers to skip some payments on their mortgages.

Nearly 19 per cent of Albertans continue to defer their insured mortgage payments, according to CMHC’s latest figures.

Alberta’s rates are more than double Ontario’s rates and nearly double B.C.’s.

The next highest deferral rates were in Saskatchewan and Newfoundland, according to information in a tweet from CMHC president and CEO Evan Siddall.

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Braden Gabert has seen plenty of his clients choosing to defer their mortgages since the program was first rolled out six months ago.

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“Those people truly did need to have mortgage deferment. They may have been forced to sell their home if they didn’t,” said Gabert, who is a broker and owner at MortgageLine in Calgary.

But Gabert said it wasn’t just people who were in desperate need. He figures about half of his clients who deferred mortgages saw it as an opportunity.

“A chance to save a little bit of money and to pay off other things. Hopefully, that’s what they did. Take some of that money and maybe paid off some other debts and liabilities. Then it put them in a better position without having to see too much of that interest accrued for the lifetime,” Gabert said.

Calgary homeowner Cheryl Bonnett was convinced by a friend to not take advantage of the program back in April. Her friend had raised concerns about how it would impact her credit score.

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“I wish I would’ve not taken her advice and did the deferrals for six months because that money I could’ve put towards something else like paying off if I bought a vehicle or my line of credit — anything just to get me ahead a bit more,” Bonnett said.

The concern now is what happens when people without jobs need to begin paying their mortgages again.

“It’s definitely going to affect the real estate market because with the people that are deferring their mortgage and if they are not going back to work and they can’t make their mortgage payments, there is a likelihood that we will see an increase in inventory hit the market,” said RE/MAX First realtor Justin Havre.

Havre said it’s no surprise that Alberta has the highest rate of deferrals given the province’s unemployment rate.

Experts advise that if you still need help, talk to your lender to see if you can refinance or if another deferral is possible.

“You’re paying interest on interest on that principal, so yes, you are paying a little bit more for the life of your mortgage, but again, when we are in desperate times with this pandemic, I don’t think the drawbacks outweigh what the pros are for this,” Gabert said.


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