For those still under financial stress due to job loss, diminished hours and financial uncertainty caused by the ongoing pandemic measures some relief has been extended by the a few of the major Canadian banks.

The Royal Bank of Canada and Toronto-Dominion Bank have each extended the deadline to apply for deferrals – payment pauses – on mortgages, credit cards, lines of credit and other loans until September 30th.

The Canadian Imperial Bank of Commerce will also approve new deferrals for clients who have yet to access the program until September 30th. According to CIBC spokesperson Trish Tervit, other relief could be available on a case by case basis.

According to spokespeople from the Bank of Montreal and National Bank, needs are being assessed on a case by case basis.

Canada’s banking regulator the Office of the Superintendent of Financial Institutions has some concern that the deferral programs are masking the potential for a wave of defaults. RBC and National Bank are reporting that the majority of borrowers who deferred are returning to full payment status.

If you are deferring, you do need to be aware that the interest for each months deferral will be added to the capital balance of your loan in some fashion and that the term of your loan is essentially extended by one month for each month you miss if you do not accelerate or lump sum the amount deferred in some manner. In finance there is no “free lunch”.

If your deferral is running out – or you want to defer for the first time, be proactive and contact your financial institution. There is a reason why you likely insured your loan with CMHC, Genworth or Canada Guaranty and your financial institution does not want you to default, they will help.