The world certainly has changed in many unimaginable ways over the past
few weeks. COVID-19 has changed how we interact, closed our schools, and our
non-essential businesses. Many people are working from home and some have
unfortunately been laid off. Our borders are closed and we’re physically
distancing ourselves from our friends, colleagues and even family.
The financial and mortgage markets have changed and we are all adapting to the
new normal. As we wait it out, here’s a recap of what has happened with respect
to mortgage financing.
On March 4, the Bank of Canada (BoC) lowered its overnight rate by 50 basis
points to 1.25%
Then on Friday, March 13, in an unscheduled emergency meeting in collaboration
with OSFI and the Ministry of Finance, the BoC lowered its overnight rate by
another 50 basis points to 0.75%, and many other supportive measures were
announced. This unscheduled rate decision was a proactive measure against the
negative impacts of COVID-19 to Canada’s economy.
And on March 27, in yet another unscheduled emergency meeting, the BoC lowered
its overnight rate once again by 50 basis points to 0.25%.
These moves and many of the other policies announced by the Bank of Canada,
OSFI and Ministry of Finance were made to stabilize Canada’s financial system
and economy during a period of unprecedented uncertainty.
The banks passed on these discounts to consumers and businesses by reducing
their Prime rates, currently sitting at 2.45% for most institutions. These
reductions made loans that are priced off of PRIME rates such as Lines of
Credits and Variable Rate mortgages, cheaper for clients and businesses who
were already in those products.
In addition to all the changes I’ve already mentioned, The Government of Canada
introduced a comprehensive package of financial and economic supports to help
individuals and businesses impacted by the virus. For more information about
what’s available, go to www.Canada.ca. Many provinces have also
announced their own initiatives, and if you’d like more information on those,
please reach out and I’m happy to assist.
There have been many changes in the mortgage industry, but TMG is fully digital
and ready to serve you. Many lenders are now offering programs to help home
owners in financial difficulty by offering mortgage payment deferments. Which
we must stress is not waiving the payments or an interest holiday, but rather
an extraordinary measure to help those in vulnerable situations. Further, the
way we conduct business has changed. We’ re using various online tools to
continue to be able to meet your needs. Almost the entire mortgage transactions
can be handled online and through e-signatures from the comfort of your own
home. We are still here, open, and ready to serve you.
My commitment to you has not wavered during this period of uncertainty, and am
available to you every day to provide you with the information and the
assistance you may need. Two of the biggest questions I get today are about
mortgage deferments and what options and rates are available to me today. The
market is changing by the day, in some cases by the minute, so I welcome you to
reach out to analyze your situation.
If you have any questions and/or would like to talk about your mortgage or the
housing market, please contact me.
Stay safe