Canadians continue to prioritize mortgage payments despite crisis

2020-12-21 | 09:23:04

This year was one of change for the labour market, as COVID-19 caused a dramatic rise in global unemployment, with 2.7 billion workers affected by lockdowns world-wide. With millions of Canadians out of work, many economists were worried that mortgage defaults would send the housing market into a spiral. However, despite a weakened demand for housing at the beginning of the pandemic, sales and prices sprang to record highs in subsequent months. This demonstrates the strength of the Canadian housing market. And with employment and economic activity heading into recovery, Canadians are unlikely to be defaulting on their mortgages en masse unless “another unexpected disaster strikes.” Canadians as a whole have a good track record in keeping their mortgages up to date, even under trying circumstances. It was estimated that 92% of Canadian homeowners have at least 25% equity in their property. With so much equity, many homeowners seek refinancing or home equity loans to access cash. While many borrowers did take advantage of deferral relief programs during the pandemic, their payments resumed as normal when the programs expired. Scotiabank, for example, said 99% of mortgage borrowers whose deferrals have expired are current on their mortgage payments.