A higher percentage of homeowners in Edmonton and Calgary have deferred their mortgage payments than in any other major city in Canada, according to figures shared by the Canada Mortgage and Housing Corporation.
In Edmonton, 21% of mortgages were deferred in August, according to a list tweeted by CMHC President Evan Siddall. Calgary followed closely with 18 percent.
Overall, deferrals were requested in 18.9% of mortgages in Alberta, double those in Ontario and Quebec.
“We have dealt with low energy prices before, then COVID-related shutdowns kept people from paying their mortgage bills and led to even lower prices, leading to more layoffs,” Raja Bajwa said. , President of the Economics Society of Northern Alberta.
Major Canadian banks announced mortgage relief programs in March and April that allow mortgage payments to be deferred for up to six months.
With postponements ending, it remains to be seen whether those who depend on the programs will face foreclosures or find other strategies to pursue payments, Bajwa said.
August reports @CMHC_ca by some large cities:
Vancouver – 11%
Kelowna – 12%
Calgary – 18%
Edmonton – 21%
Regina / Saskatoon – 14/15%
Winnipeg – 11%
Toronto – 12%
Ottawa – 7%
Montreal – 10%
Quebec – 7%
Halifax – 10%
St John’s – 14%
“It will kind of be holding our breath to see where it is at,” he said.
According to Todd Bradley, a real estate agent at Royal LePage in Edmonton, homeowners who accepted deferrals fell roughly into two categories: those who used the deferral as a way to accumulate money or to pay off other debts. consumption, and people who “really put a bandage on some very heavy bleeding.”
“There’s a good chance they couldn’t make the payments three or four months ago and they can’t make the payments now that the postponement ends,” Bradley said in an interview with CBC radio. Edmonton AM.
“These people are going to be in a whole world of pain.”
Edmonton AM5:21Edmonton mortgage deferral rates rise
Bradley predicts the industry will see a jump in foreclosures.
“I don’t think it’s going to be catastrophic, but they’re going to increase.”
Although the justice system is getting back on track after shutting down at the start of the pandemic, lockdown cases are well overdue, he said.
“You probably won’t see the court foreclosures for six or seven months – easily that long.”
Bradley notes, however, that there may be a silver lining for potential buyers.
“If you have a steady job and you have a little down payment, mortgage interest rates have never, ever been so low.”
Lenders will need to plan
Mark Holtom, a mortgage broker at Dominion Lending Centers, believes part of the reason Alberta’s carry-forward proportion was so high was because the province has fewer mortgage holders than either Ontario or the Quebec.
Banks weren’t set up to run the program when it started, resulting in long waits on the phone, which would have been even longer in places with a higher proportion of mortgages, Holtom said.
Those looking for a postponement but not necessarily needing it would have retreated somewhere along the way, he said.
“I think Alberta may have been a little luckier in allowing them to be postponed.”
The impact of the postponements will likely be visible over the next six months, Holtom said. But with many people returning to work, he sees no disaster coming.
“You’re probably going to see a small percentage of properties that could be foreclosed or that would normally be foreclosed,” he said.
With the backing of the courts, Holtom said, lenders will have to make decisions that could result in further postponements.
“It’s in their best interest to work with these borrowers to come up with a plan,” he said.