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 on 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, visit The Government of Canada website. Many provinces have also announced their own initiatives, and if you’d like more information on those, please reach out and we'll be happy to assist.
There have been many changes in the mortgage industry, but Arise Mortgage is fully digital and ready to serve you. Many lenders are now offering programs to help homeowners 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.
Our commitment to you has not wavered during this period of uncertainty, and we're available to you every day to provide you with the information and the assistance you may need. Two of the biggest questions we receive today are about mortgage deferments and what options and rates are available today. The market is changing by the day, in some cases by the minute, so we 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 us.