Coronavirus whirlwind change in mortgage market stress test paymen deferral mortgage bond approveu mortgage

Coronavirus Causing A Whirlwind Of A Week

In Bank of Canada, Coronavirus, Interest Rate Trends, Miss A Payment, OSFI, Stories, Stress Test by Vancouver Mortgage Broker

Summary of announcements made this week from the coronavirus pandemic.  Some may assist you financially and we have provided easy to reference links…

MARCH 13, 2020

Bank of Canada surprisingly reduces the overnight rate an additional 0.50% (after reducing it 0.50% 10 days before) bringing the overnight rate to 0.75%.  The overnight rate reflects the prime rate that borrowers lending rates are based on.  Prime rate reduces from 3.95% to 2.95% reducing existing holders of variable mortgages & lines of credits.  View Announcement

Office of the Superintendent of Financial Institutions (OSFI) suspends the proposed stress test that was to take effect April 6, 2020 and will review when conditions stabilize  |  Simultaneously announced was the reduction of the Domestic Stability Buffer which will help domestic systematically important banks support over $300 billion of additional lending capacity during an expected period of disruption.  View Announcement

Department of Finance announces the Business Credit Availability Program which will provide $10 billion in financing to companies.  View Announcement

MARCH 17, 2020

Government of Canada announces it will buy $50 billion of insured mortgage pools through CMHC.  “This action will provide stable funding to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses”.  View Announcement

MARCH 18, 2020

Government announces Canada’s COVID-19 Economic Response Plan announces support for Canadians & businesses.  Includes…
– Temporary income support for workers & parents without paid sick leave who are sick, quarantined, or forced to stay home to care for children.
– Longer term income support for Canadian workers who lose their jobs or face reduced hours as a result of COVID-19.
– One time support payment for low & modest income earning families.
– Increase to Canada Child Benefit.
– 3 month wage subsidy of up to $25,000 for small business owners to help prevent layoffs.
– Tax return filing deadline extended to June 1, 2020 and taxes owing deferred to August 1, 2020.
– 6 month interest free moratorium on Canada Student Loans
– Funding for the Indegeneous Community, homeless, and women/children fleeing violence
– Reduced required minimum withdrawals from RRIFs
View Announcement

Bank of Canada Benchmark Rate for mortgage qualification purposes reduces from 5.19% to 5.04%.  View Chart

MARCH 19, 2020

Banks, credit unions, trust companies and alternative mortgage lenders announce mortgage payment deferrals will be offered.  View Article

We can bet there’s more to come this week.  Stay healthy and stay safe.  Here is a reminder video from the WHO on how COVID-19 is spread and how to protect yourself…