UPDATE March 25, 2020: Yesterday, the federal government passed legislation that suspends most federal student loan payments from March 30, 2020 to September 30, 2020. Check out this article to learn more.
This morning, Prime Minister Justin Trudeau and Finance Minister Bill Morneau announced significant assistant programs for Canadians as a result of the COVID-19 crisis. These include federal student loan payment deferrals. Morneau indicated that he has been working with Canadian banks to provide further assistance to Canadians affected by the COVID-19 crisis.
Further to those announcements, the 6 major banks (Bank of Montreal, National Bank of Canada, RBC Royal Bank, Scotiabank, CIBC, and TD Bank) released announcements that they are going to work with personal and small businesses on a "case-by-case basis." Here is a quote from TD Bank's press release:
"Effective immediately, [the 6 major banks] have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID-19; childcare disruption due to school closures; or those facing illness from COVID-19."
During his announcement, Finance Minister Morneau encouraged Canadians to reach out to their mortgage lender to discuss payment arrangements.
To try and understand what terms or options would be offered to individuals, CLP Law reached out to a couple mortgage providers. One advised that the bank was still working out particulars, but expected to be offering deferred principal payments for 6 month. However, interest payments would still be required during that time. The deferred principal payments would be added on to your mortgage term.
On the other hand, another mortgage lender indicated they would offer a full 6-month deferral of all principal and interest payments. Interest would continue to accrue, and would be added to the mortgage payments after the 6-month period, increasing the monthly payments after the deferral period.
Consequently, each lender is providing their own tailored program on a "case-by-case basis."
If you have recently:
lost your job
are required to self-isolate or quarantine
need to stay home to care for a sick family member or
stay home to care for kids
and if doing so has resulted in a loss of income, you should reach out to your mortgage or loan provider to discuss options.
Here are the full statements from each of the major 6 banks. Click their name to review their statement:
Federal Student Loan Payment Deferral
Finance Minister Morneau announced a 6 month interest free moratorium on student loan pay-backs. That was the extent of the announcement, and we are awaiting further details.
UPDATE March 25, 2020: Yesterday, the federal government passed legislation that suspends most federal student loan payments from March 30, 2020 to September 30, 2020. Check out this article to learn more.
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