"That's why the banking industry as a whole is stepping up with this further package", says New Zealand Bankers' Association chief executive Roger Beaumont.
"The large number of customers that have been helped continues to grow as the result of concerted efforts by front-line workers, contact-centre agents and operations teams working diligently", he said.
The ramp-up of mortgage purchases by CMHC is one of a slew of moves by the federal government, along with the Bank of Canada and the Office of the Superintendent of Financial Institutions, to shore up financial liquidity as the fight against the coronavirus delivers a severe economic shock. Customers in good standing who have been impacted by the pandemic can apply, with deferrals available for an indefinite period and no deadline to apply, according to the association. While there are obvious advantages for people in need, repayment deferrals may extend the time it takes to repay the loan and will add interest cost. The additional interest is incorporated into future monthly payments when they resume, or upon renewal at the end of the mortgage's term.
Canada's big banks have promised interest rate relief for up to six months to Canadian borrowers struggling to make their payments, but the CBC has reported that the fine print of those programs make it so that the deferred interest must be paid back at some point, which makes the loan longer and more expensive.
"Banks will have different approaches to how they manage the process for customers to opt into a mortgage deferral".
"This action will expand the stable funding available to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses", the agency said in a statement.
"Importantly, we'd like to acknowledge the government's support for this package".