Alberta has highest rate of mortgage deferrals as bank programs wind down

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Alberta continues to have the highest rate of mortgage deferrals in the country.

According to numbers shared by the Canada Mortgage and Housing Corporation, many are still using the pandemic support program — which is winding down.

Nearly 19 per cent of Albertans continue to defer their insured mortgage payments, according to CMHC’s latest figures.

CMHC president and CEO Evan Siddall tweeted the numbers this week, showing that 18.9 per cent of mortgages in Alberta were deferred.

In May, Siddall had warned a House of Commons committee that the country could see a “deferral cliff” when some unemployed people are required to begin paying their mortgages again this fall.

The next highest deferral rates were in Saskatchewan and Newfoundland.

Siddall said around 11 per cent of all homeowner transactional insured mortgages are in deferral across the country, and that factors like unemployment rates and government supports will play a role in deferrals and house prices going forward.

Lisa Lafrance, a mortgage broker with the Sherwood Mortgage Group, said Alberta’s economy had taken some hits even before the coronavirus pandemic. 

“We were likely hit harder than other places and probably the anxiety level was even higher than places that had more COVID, just because of the double whammy we were being hit with,” she said.

Lafrance says Albertans are resilient and the risk for defaults isn’t any different here than in other provinces.

She’s advising her clients to resume payments, if possible.

“It’s not that it’s harming your credit, it’s that a lender is going to say, ‘why am I going to lend more money to you, or different amounts of money to you, when you’re currently in hardship?’,” Lafrance said.

She said getting out of deferral status will help if they are seeking future loans or have any dealings with the bank.

Alberta has highest rate of mortgage deferrals as bank programs wind down
Mortgage broker Lisa Lafrance says many Albertans are now dealing with the repercussions of deferred mortgages. (Submitted by Lisa Lafrance)

“I’m telling clients that if everything is that good, you need to just get yourself out of deferral so the bureau can start reporting that you’re able to make those payments, and are making those payments.”

Realtor Jamie Ruff with Re/Max in Calgary has some concerns.

He says there was movement in sales and listings throughout September as the market picked up, but Albertans aren’t in the clear yet.

“Eventually that program is going to end, and people will have to come to terms now with reality,” Ruff said.

Across the country, homeowners are slowly resuming payments — including here in Alberta.

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