Lenders' payment deferrals kept a significant number of households liquid during the early months of the pandemic
![CMHC: Mortgages represented vast majority of all consumer debt deferred](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://cdn-res.keymedia.com/cms/images/ca/046/0379_637521700525995512.jpg)
Underscoring the crucial role that payment deferrals played in keeping Canadian households afloat during the height of the pandemic, an estimated 16.7% of the nation’s outstanding mortgage balance was in deferral as of mid-2020.
New data from Canada Mortgage and Housing Corporation showed that mortgage deferrals represented 86% of all consumer debt deferred.
On average, the per-loan balance of deferred mortgages was $270,597. In comparison, the average balance for all outstanding mortgages was $219,077.
The lion’s share of the postponed payments was at the Big Six, which held 79% of the total mortgage balance in deferral as of the end of June last year. Among the major banks, 18.1% of their outstanding mortgage balances were in deferral, while lower volumes were seen in other banks (11.7%), credit unions (10.6%), and other lenders (16%).
Geographically, the rate of deferrals was higher in Alberta than anywhere else in Canada, with the province seeing 24.1% of its outstanding mortgage balance being deferred as of June 30, 2020. Other territories that saw an elevated proportion of deferrals were Newfoundland and Labrador (20.2%) and New Brunswick (16.8%).
“Among the Big Six banks, 24.8% of the outstanding mortgage balance in Alberta was deferred,” CMHC said in its report. “The figure was 20.7% in Newfoundland and Labrador, 9.6% in Yukon, and between 10% and 20% in the other provinces and territories.”
With the Canadian economy exhibiting sustained recovery since then, the total mortgage balance in deferral fell by 79% from June to December last year. During the same period, the total balance of non-mortgage consumer debt in deferral declined by 88%.