Mortgage payments can be deferred for up to six months — but the interest on those payments will be added back to the outstanding balance, resulting in customers paying interest on top of deferred interest and increasing the total cost of borrowing. For the Merles, that means deferring their mortgage payments for four months will cost them an additional $7,400 in interest. INTERACTIVE | Tracking the coronavirus in CanadaConacher says not only should banks not be charging mortgage interest on top of interest, but now is the time for them to forgo some of their "staggering" profits and temporarily forgive mortgage payments altogether. "So the government should require them to cut [mortgage] payments right now and not add those payments on later — unless the banks can prove that they need those loan payments in order to profit." With Canada Mortgage and Housing Corporation (CMHC) data showing the average monthly mortgage payment for homeowners is $1,326, the CBA calculates that the banks' mortgage deferrals add up about $778 million a month.

Source: CBC News April 11, 2020 07:52 UTC