Covid-19 Mortgage Deferrals; Unintended consequences?

As a collection agency with offices in Edmonton, Calgary, and the GTA we are watching with interest for any unintended consequences brought on by the massive degree of Covid-19 mortgage deferrals that started this past spring.  What transpires in the rest of Canadian credit markets over the coming six months should prove interesting.

As ones who recognize the pointlessness and fallacy of predictions we are left to simply rely on the fact that; The prudent see danger and take refuge, but the simple keep going and pay the penalty (Proverbs 27:12)

The ability of the Canadian Mortgage and Housing Corporation (CMHC) to accurately predict trends is wanting.  Their actual predictive success rate basically mimics the .135 batting average of a typical major league journeyman back up catcher.  On the other hand, the actual true data that is reported in the CMHC’s annual Residential Mortgage Industry report is well worth a look.

Key Highlights – Mortgage lending trends


  • The acceleration of the total outstanding mortgage debt during the first half of 2020 partially reflected the trend in sales concluded before the pandemic-induced shutdowns and mortgage repayments.


  • Canadian financial institutions have provided mortgage payment deferrals for up to six months to assist mortgage customers during COVID-19. These measures have resulted in a total of 760,000 deferred or skipped mortgage payments across chartered banks.


  • As many non-bank financial institutions allow deferrals, we expect the total number of mortgages deferred to be higher. For example, there were 10% of deferral requests across Mortgage Investment Corporations (MICs).


  • Mortgage deferrals will affect scheduled periodic repayments. With the average monthly payment being approximately $1,333 in Canada, the total amount of deferred mortgage repayments is estimated at slightly over $1 billion per month.


  • There continues to be a risk that a significant increase in mortgage delinquency will be observed in the third or fourth quarter of this year as these deferral agreements come to an end.


Rate, insurance, lender type, and funding trends can be seen by viewing the full report found here