Mortgage Deferral

Millions

Inspired Forum Member
Registered
Just wondering if anyone is going to be using the mortgage deferral that's being offered by banks?

I'm wondering how it works. From what I've heard, some will give a deferral of 6 months.

But then I'm guessing it added to the end of your mortgage, extending it for that time period.

Anyone have advice on this?
 

Thomas Beyer

Senior Forum Member
REIN Member
6 months often only for personal residence not rental properties.

Situation very fluid right now due to CoronaVirus.


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Christopher Franco

Inspired Forum Member
REIN Member
I was successful to defer mortgage payments on my rental properties for 3 of them and 1 principal.


CIBC - 4 months
Desjardins - month to month review. Delayed 1 more currently.
National bank - waiting for callback
EQB - waiting for callback
Home trust - waiting for callback
RBC - deferred 6 months


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Angie11504

Inspired Forum Member
REIN Member
I wonder how the mortgage deferral works, is that good or bad for rental properties? Do we need to proof job loss for mortgage deferral?


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Millions

Inspired Forum Member
Registered
I was successful to defer mortgage payments on my rental properties for 3 of them and 1 principal.


CIBC - 4 months
Desjardins - month to month review. Delayed 1 more currently.
National bank - waiting for callback
EQB - waiting for callback
Home trust - waiting for callback
RBC - deferred 6 months


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Do you know what happens with those months?

I've heard some banks are just adding them to the end of the term, while others want it paid back before the end of the term
 

Martin1968

Frequent Forum Member
Registered
It seems that its exactly like they say it is. It’s a deferral announcement. Not a ‘forgiving payment’ or gifted mortgage payment. And for now it seems it’s only the 6 big banks that made that announcement.

What does everyone do themselves? Do you, or are you willing to defer or forgive rent payments to your tenants? I personally have not send out a letter or announcement to any of my tenants. I’ll play it by ear and deal with non rent or late rent payment when they occur. Where needed I will work out arrangements.

I think it would be best to sit it out for a while, if you have $ reserves you should be able to, and before you start to defer you could also see if your bank offers a 1 month deferral payment on your online banking.
 

alaas1977

Frequent Forum Member
REIN Member
Atb (as of yesterday)is making the interest that was deferred due at the end of your term ie renewal, so if you have a 4 years left on term at renewal you would pay the interest you skipped. Regarding LOC's you can defer the payments but they are due at the end of the six months so definately not worth it.

Scotia is currently only looking at personal residence but this could change, RBC said go online and "skip a payment" and then in a few days when cools off call in to defer for 6 months and shouldn't be a problem, I will update.

Please note we are deferring payments to be on the safe side due to the large number of suites we have, if not needed we will plop back on a mortgage.

Lisa
 

Tina Myrvang

Client Care Lead
Staff member
REIN Member
Atb (as of yesterday)is making the interest that was deferred due at the end of your term ie renewal, so if you have a 4 years left on term at renewal you would pay the interest you skipped. Regarding LOC's you can defer the payments but they are due at the end of the six months so definately not worth it.

Scotia is currently only looking at personal residence but this could change, RBC said go online and "skip a payment" and then in a few days when cools off call in to defer for 6 months and shouldn't be a problem, I will update.

Please note we are deferring payments to be on the safe side due to the large number of suites we have, if not needed we will plop back on a mortgage.

Lisa
Thanks Lisa
 

Millions

Inspired Forum Member
Registered
Interesting. So, if I take 6 months deferral and the interest amounts to say - $2,500. So at the end of my term, which is currently August 2022, I would have to pay that $2,500 before signing a new term? But not the principal?

It's not exactly helping anyone who lost their job, other than to give them time to find a new one I suppose. But not quite like Italy, where they halted mortgage payments...
 

Thomas Beyer

Senior Forum Member
REIN Member
Interesting. So, if I take 6 months deferral and the interest amounts to say - $2,500. So at the end of my term, which is currently August 2022, I would have to pay that $2,500 before signing a new term? But not the principal?

It's not exactly helping anyone who lost their job, other than to give them time to find a new one I suppose. But not quite like Italy, where they halted mortgage payments...

Yes the next 2 payments or so would be applied to interest and then the regular mortgage continues.

So really an interest accrual. Banks don’t lose a nickel.

Credit unions (We have four mortgages with three credit unions) very easy to deal with. CIBC and TD a royal pain with long telephone wait times but both deferred now too.

Commercial mortgages do case by case reviews with full application incl cash balances and traffic in and out of the corp bank account for the last six month.


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 
Last edited:

Millions

Inspired Forum Member
Registered
I was successful to defer mortgage payments on my rental properties for 3 of them and 1 principal.


CIBC - 4 months
Desjardins - month to month review. Delayed 1 more currently.
National bank - waiting for callback
EQB - waiting for callback
Home trust - waiting for callback
RBC - deferred 6 months


Sent from my iPhone using myREINspace


Are there any issues with collecting rent and deferring the mortgage? Would this then be seen as normal income, since there's no expenses?
 

Thomas Beyer

Senior Forum Member
REIN Member
Are there any issues with collecting rent and deferring the mortgage? Would this then be seen as normal income, since there's no expenses?

At year end you tally rent and all expenses (remember, interest is not expense but not principal reduction).

So yes you may have a profit or higher taxable income than the year before.

Congrats.

Celebrate having not only survived but thrived in a brutal virus year by going to Hawaii (or your favourite Mexican, Asian, Caribbean or European destination) while oil burning planes are still legal.

You can then, optionally, reduce net income by up to 4% of the asset’s book value (excl land) to bring taxable income to zero. This CCA (capital cost allowance) or also called depreciation has to be counted as income later, on asset sale. As such real estate can work like an RRSP ie tax deferral.


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 
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