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.
- 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.”