Canadians’ mortgage deferrals far outpace the US rate

Mortgage Purchasing New Immigrants

Since the advent of the worldwide Covid-19 pandemic and its insidious effect on the world’s economy, mortgage payment deferral has been the norm all across North America. While that was perhaps largely anticipated, as lenders began agreeing to make these deferrals back in March, it’s less likely that anyone might have foreseen the asymmetry between deferral rates across the U.S. and neighboring Canada. While U.S. deferral rates reached their apex in June, dwindling from that point on, Canada’s rates have remained high, outstripping the U.S. rate by double and still climbing on. The Canadian avalanche of deferrals began back in April. At that point, deferrals were being applied to 10% of Canadian mortgages. The numbers bounced up to 15% by the first week of May and have now reached 16% according to statistics from the Canadian Bankers Association. Comparatively, the U.S. climb looks far more moderate, with April statistics showing that 2.73 of U.S. mortgages were getting deferrals. That number rose considerably by the first week of May, when it became 7.91% of mortgages which were getting deferrals. Then the total number of deferrals peaked in June, at 8.55%.

Key Takeaways:

  • Deferred mortgage payments have been the norm since the pandemic first effected the economy. The rate of these deferments, however, is startlingly different between the U.S. and Canada.
  • Fiscal data all across Northern America shows that Canadian mortgagers are requesting deferments at double the rate of their U.S. counterparts.
  • North American banks uniformly started enacting deferments around March. Then, around June, U.S. deferrals first peaked and then started to fall off.

“Figures from the Canadian Bankers Association showed that the country’s banks have deferred 16% of mortgage payments.”

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