Knowledge centre
The FCAC guideline sets expectations for federally regulated financial institutions supporting eligible consumers with principal-residence mortgages who are at risk because of exceptional circumstances. It is not a universal relief program for every mortgage.
A federally regulated lender cannot make its optional mortgage life insurance a condition of mortgage approval. It must disclose the cost, obtain express consent and provide cancellation information.
A collateral charge may secure more than the mortgage. To remove or transfer it, other loans or credit lines covered by the charge may need to be repaid or moved, and legal work may be required.
Federally regulated lenders following the mortgage prepayment information code provide annual information about available privileges, maturity and how to estimate charges.
Federally regulated institutions must explain how the prepayment charge is calculated, including the process or formula and the information needed to estimate it.
The trigger rate is generally reached when the fixed payment no longer covers the required interest. The trigger point relates to the mortgage balance reaching the lender’s permitted loan-to-value or equity threshold.
Possibly, but not automatically. FCAC expects federally regulated institutions to consider waiving prepayment penalties when appropriate for qualifying consumers in severe financial difficulty.
A federally regulated lender may consider extending amortization as a relief measure, but FCAC expects the extension to be for the shortest period appropriate and accompanied by a plan to restore the amortization when possible.
FCAC expects federally regulated institutions not to charge interest on interest when a consumer receives qualifying mortgage relief under the exceptional-circumstances guideline.
FCAC expects federally regulated lenders to consider appropriate available measures, but it does not prescribe one solution or guarantee approval of a deferral, fee waiver, amortization extension or penalty waiver.