Over 3 million Canadians have had their incomes impacted by the current economic crisis. In response, several mortgage lenders have already stopped approving certain borrowers until their post-lockdown incomes are clarified. At least one bank is restricting borrowers from using funds from a HELOC for the down payment on an investment property. We may also see increased rigor applied to mortgage applications, and a risk that appraisals won’t support property values. Still, for all the poor unemployment data, mortgage rates have held steady. There’s uncertainty now, but this crisis has an end date.
Key Takeaways:
- In Canada, if you have no income, you are not able to consolidate debt by refinancing your mortgage.
- Over 500,000 Canadians have applied for the deferred mortgage payment program,
- Historically, during a downturn in the economy, mortgage foreclosures are not as common in Canada as in the U.S.
“Right now mortgage refinances top out at 80% of a property’s value, in large part because they can’t be insured against default.”
