Deferring a mortgage payment in times of hardship can be a huge relief to individuals that need cash flow for necessities, such as food. However, it’s important to remember that deferring one mortgage payment… or six… doesn’t mean that those payments are “waived.” In fact, those payments are added to the principal balance of your mortgage.
Most traditional mortgage payments are comprised of principal and interest combined. When payments are deferred the borrower is now paying interest on interest, which will lead to higher cost of borrowing over the long term. A mortgage broker can help you determine what the additional cost of borrowing will be for you.
Before you call your lender, ensure you visit the Government of Canada website COVID-19 assistance programs. Try to take advantage of all programs you qualify for to help you get through the next few weeks if you are in quarantine and unable to work. The Government of Canada has implemented programs to put money into the hands of Canadians who need help quickly to make ends meet in these unprecedented times.
Finally, in times of crisis, your health and well-being should always be a top priority. For those in financial hardship or strain due to the effects of COVID-19, the government aid programs and mortgage deferrals are there to help you manage through these difficult times, and focus on putting your health, and the well-being of your family first.
To better understand how deferring a mortgage payment will affect you specifically, and to help strategize for a long term plan that will help you with your financial situation, click “Apply Now” to speak with a MonsterMortgage.ca Mortgage Agent today.BACK TO BLOG FEED