If you’re a homeowner facing uncertain cash flow because of the current virus pandemic, there’s some positive news from Canada’s major banks and the City of Ottawa about deferral of mortgage and property tax payments.
There is also good news for those who are thinking of buying property soon and are shopping for mortgage rates. Recent Bank of Canada rate cuts in response to the economic uncertainty have led to the lowest mortgage rates in several years.
I’ve also been encouraged to hear that even with the current uncertainty, hardware stores have seen big sales in recent days as customers purchase paint, trim, flooring and other home improvement needs. Many sellers say they’ve decided to use their quiet time at home to clean and prepare their properties for listing later in the spring or early summer.
Mortgage Payment Deferrals
The Canadian Bankers Association on March 18 announced Scotiabank, RBC Royal Bank, TD Bank, National Bank of Canada, CIBC and Bank of Montreal have committed to help their personal banking and small-business customers with flexible solutions to challenges that include pay and childcare disruptions.
The Banks have pledged to work with customers on a case-by-case basis and allow those who qualify to defer their mortgage payments for up to six months.
The details will vary depending on circumstances. On its page on the virus impacts, Scotiabank explains that while you will not be required to make mortgage payments, “interest payments will continue to accrue _ so your payments will be slightly higher after the deferral period ends. You will pay more interest over the life of your mortgage, but a deferral will also help you with your short-term cash flow.”
The banks said support could also include special loans to help cover living expenses or relief from other bills.
The Banks encourage you to contact them and discuss your situation. But it’s positive news for those who have been temporarily laid off or those who need to take time off of work to care for children who are out of school.
CITY OF OTTAWA PROPERTY TAXES
Also on March 18, the City of Ottawa announced it will give property owners more time to pay their property tax bills if needed, to help residents and small businesses impacted by the pandemic. The deferral is expected to be officially approved at a Council meeting March 25. Council has offered similar assistance in the past to those affected by flooding.
The City had already issued interim property tax bills, which are based on 50 % of the previous year’s tax bill. Payment was due March 19, but the City announced the deadline would extend to April 15, 2020, with no late payment fee.
The second instalment of the Property tax bill would usually be due for payment June 18.
But the City also announced homeowners and business owners who face particular hardship will be able to apply to defer paying their bills until Oct. 30, regardless of their home’s assessed property value. The criteria for the additional deferral will be specified as part of the motion at the vote on March 25.
The City of Ottawa says it will post details on the deferral assistance on the City’s information site, at Ottawa.ca, after it has been approved by Council March 25.
For general information on the COVID-19 pandemic and response to it in the City of Ottawa, visit the city’s site, at www.Ottawa.ca/covid19. The site has links to frequently asked questions and expert advice on how to prevent the spread of the virus.
Low Mortgage Rates offer Good News for Buyers
If you’re considering buying property soon, or if your mortgage is coming for renewal, you will benefit from the lowest mortgage rates we’ve seen in several years.
In response to the economic uncertainty resulting from the pandemic, the Bank of Canada recently announced two separate rate cuts of 0.50 % _ the first in early March and a second one in the middle of the month. The Bank had not cut the rate by 0.50% in a single cut since the financial crisis of 11 years ago.
In response, Canada’s major banks have reduced their prime rates, and fixed mortgage rates are nearing the historic lows of 2016. If you’re buying soon, or if your mortgage is coming up for renewal, that’s great news.
To help find the best rate, consider contacting a mortgage broker, who can shop for different rates and the best rate for your circumstances, at no cost to you. You can also get an idea of the range of rates that are out there by checking mortgage comparison sites, such as www.ratehub.ca or www.ratesupermarket.ca
If you are renewing your mortgage soon, it can pay to shop around for rates rather than simply assuming your current lender will give you the best rate to keep your business. Often, lenders will offer better rates to new customers than existing ones. If your current lender won’t match a lower rate you see out there, you might want to switch lenders. Even a slightly lower rate can result in thousands of dollars of savings over the term of a mortgage.
Preparing for a Spring-Summer Sale
As you know if you’ve been following the state of the local resale housing market, Ottawa has experienced lower than usual inventory for much of the past year.
But we can expect a big surge in new listings when the outlook brightens.
With stores, restaurants, gyms and theatres closed, I’ve been hearing that a lot of people have decided to use their extra time at home as a good reason to do intensive spring cleaning, de-cluttering and fresh paint treatments, as they prepare to list their properties in coming months.
If you would like feedback on buying or selling in Ottawa and some thoughts on the ideal time to list your particular property, feel free to give me a call at 613-747-4747.
These are challenging times, but by following the advice of medical experts on how to keep ourselves and others healthy, we will get through this. Stay well, everyone!