Needless to say, it’s been an eventful past two weeks. As Canada is more or less shut down while our leaders grapple with how to handle the new virus, time seems to be moving at a snail’s pace. But while we’ve all been practicing our ‘social distancing’, the Federal Government has been busy implementing a wide range of new directives, focused primarily on mitigating the effect of this economic downturn on the day to day lives of ordinary Canadians.
On March 18th, the Prime Minister announced a broad stimulus package totaling $27 Billion, directed at small businesses and private citizens. While the federal money targeted at small and medium sized businesses is intended, primarily, to allow companies to continue to pay rent and maintain payroll during these weeks of near-total economic shutdown, the measures aimed at private citizens should have an immediate beneficial impact on Canadian household budgets.
Foremost among these measures are: an increase to the annual Canada Child Benefit (increased by $300 per child), a deferment on the payment of income tax (until September 1st), a powered up employment insurance program, and additional support for people who might not be able to make their mortgage payments during these uncertain times.
The measures directed at mortgage relief take effect immediately, and CMHC, working with the major Canadian banks, has moved to enact a six-month deferral on mortgage payments, in addition to offering credit relief on a case-by-case basis.
There is currently confusion regarding these measures and, specifically, what impact (if any) they will ultimately have on consumer credit scores. There is also the matter of interest continuing to accumulate on deferred payments, should a homeowner opt to take advantage of this program.
According to an article published on the CBC’s website only yesterday:
“In effect, it’s as though the bank is loaning you the amount that you would have paid in interest during the deferral period and then charging you interest on that loan as well.” Click here for more information.
Another option will be to extend the amortization period of the mortgage, and simply make six extra payments at the end of your existing term. However, doing so will apparently require a full credit application and could negatively affect your credit score.
In sum, these are emergency measures and have been put in place quickly to respond to an extremely dynamic situation. The bottom line: if you’re comfortable financially and are fortunate enough to not need the deferment – don’t take it.
While these are undoubtedly uncertain times, the Waterloo Region real estate market has continued to show unmistakable signs of life. Buyers are still active in our market, as family plans which have been in the works for months now are often not so easy to defer as a mortgage payment. Folks who might have sold their home earlier in the year still need a place to live, and our brokerage is dedicated to servicing these needs as efficiently and professionally as possible.
According to Ontario Premier Doug Ford, real estate has been deemed an essential service to the province’s population during these uncertain times. While Chestnut Park West has closed its physical offices in observation of the heath authority’s recommendations regarding social distancing, our Realtors and administration staff are 100% equipped to carry on with business remotely. In fact, our entire business model from Day One has since been geared towards allowing our agents and staff to have access all necessary resources from anywhere at anytime. We likewise stand ready to continue assisting you, our clients.
Rest assured that Chestnut Park West, while continuing to service our clients, is committed to upholding the most stringent of measures to safeguard our clients’ health and those of our Realtors.
Keep an eye on this space for updates, as the situation remains very fluid and rules and regulations are changing virtually by the hour. I will do my utmost to bring you timely and accurate information. For more, please don’t hesitate to reach out to me directly. Chestnut Park West prides itself on maintaining up-to-date market knowledge and on always being available to assist!