One province stands out with the highest active mortgage deferral rate
As of September 30, Canada Mortgage and Housing Corporation’s entire insured book of business had 5% of loans in deferral, down from approximately 8% in August.
In a data release outlining its third-quarter results, CMHC said that its Q3 net income stood at $336 million. This accompanied an increase of $42 million (28% annually) in other income, “mainly caused by a reduction in our expected credit loss provisions … by $22 million due to more optimistic financial market projections,” the Crown corporation added.
CMHC said deferrals are feeding into higher expenses from insurance claims.
“Although our actual claims paid have been lower year over year, the level of paid claims may increase should our estimates of claims coming from this book be realized,” CMHC reported.
The highest active mortgage deferral reading was Alberta’s 10%. Ontario, which is currently reeling from a particularly dangerous second wave of COVID-19 infections, posted a 4% active deferral rate.
But while “76% of the jobs lost in the first two months of the pandemic have been recovered as of September 2020,” CMHC said that the resurgent coronavirus outbreak “generates renewed uncertainty on the recovery path of the economy and incomes to pre-pandemic levels… A return to pre-pandemic economic activity is unlikely until effective vaccines are discovered and widely distributed.”
Until then, the market will likely be in rougher waters.
“Going forward, the expected worsening of households and businesses’ financial position from the pandemic will raise housing market vulnerabilities,” CMHC said. “Therefore, housing markets face significant downside risks in the medium term.”
