Canadians benefit from mortgage relief measures through FCAC’s actions

From: Financial Consumer Agency of Canada

News release

December 19, 2024

Ottawa, Ontario

Canadians with mortgages from federally regulated financial institutions (FRFIs) benefitted from more than 8,000 mortgage relief measures between July 5, 2023, and June 30, 2024. These relief measures enabled mortgage holders to avoid more than $4,000,000 in penalties and fees they would have incurred when dealing with late or missed mortgage payments. 

These results are included in a report published today by the Financial Consumer Agency of Canada (FCAC). FRFIs provided consumers with these relief measures in response to the requirements established by FCAC in its Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances.  

The most common relief measures FRFIs implemented to support consumers were waiving penalties for lump-sum payments that were made to avoid negative amortization, and waiving interest charges on interest. 

In early 2023, FCAC recognized that Canadians were facing a challenging economic environment that could lead to severe financial stress among some mortgage holders. In response, FCAC issued this regulatory guideline that sets out expectations for FRFIs to support consumers who are at risk of defaulting on their mortgage for their principal residence.  

FCAC expects FRFIs to support consumers by:

  • identifying early signs of severe financial stress and mortgage accounts at risk of default 

  • proactively contacting the holders of mortgage accounts at risk of default to allow them to make timely and informed decisions  

  • establishing criteria for offering appropriate relief measures, informed by the specific circumstances and financial needs of mortgage holders

Mortgage relief programs implemented in response to FCAC’s guideline have either enhanced or complemented FRFIs’ pre-existing hardship programs.

FCAC will continue to monitor industry compliance so that Canadians experiencing financial difficulties benefit from the mortgage relief options as set out under the guideline.   

Quotes

“FCAC’s mortgage guideline has contributed to a supportive environment for Canadians when they needed it most. Many Canadians have been able to bridge temporary gaps between what they owe on their mortgage and what they are able to pay thanks to the mortgage relief options offered by federally regulated financial institutions. While financial stress for mortgage holders has remained stable, many more mortgages are coming up for renewal over the next couple of years and FCAC’s guideline will remain an important safeguard for Canadians experiencing financial difficulty.” 

Frank Lofranco, Deputy Commissioner, Supervision and Enforcement, Financial Consumer Agency of Canada

Quick facts

  • The Financial Consumer Agency of Canada (FCAC) protects Canadians by supervising the compliance of federally regulated financial entities, such as banks, with their legislative obligations, codes of conduct and public commitments, and by strengthening Canadians’ financial literacy.

  • All FRFIs that offer residential mortgages have implemented FCAC’s guideline and are reporting quarterly on the measures they are implementing to support consumers, as required.

  • The relief measures made available by FRFIs in response to the FCAC Guideline allowed mortgage holders to avoid more than $4,000,000 in prepayment penalties for lump-sum payments to avoid negative amortization, and more than $200,000 in fees and costs because they were waived by FRFIs. 

  • Mortgage lenders may charge consumers a prepayment penalty if they:

    • pay more than the allowed additional amount toward their mortgage

    • break their mortgage contract

    • transfer their mortgage to another lender before the end of the term

    • pay back the entire mortgage before the end of the term, including when they sell their home

  • Consumers may experience negative amortization when their monthly payment is not enough to cover the interest due. The unpaid interest is added to the principal amount. Consumers end up paying interest on a higher principal amount in subsequent months, effectively paying interest on interest.

  • To help Canadians navigate housing and home financing, in 2024, FCAC launched a national advertising campaign titled “Housing Costs on Your Mind.” The campaign raised awareness of tools and resources available to help Canadians make informed decisions about: 

    • financing and paying for a home 

    • renting or buying a home 

    • choosing, renewing, and paying down a mortgage 

Associated links

Contacts

Media Relations 
Financial Consumer Agency of Canada  
343-999-1450 
media@fcac-acfc.gc.ca

Search for related information by keyword: Finance | Personal finance | Financial Consumer Agency of Canada | Canada | Money and finances | general public | news releases

Page details

Date modified: