# 2024-023 Pay and Benefits, Canadian Armed Forces Relocation Directive

Case summary

F&R Date: 2025-01-23

The grievor grieved the Director Compensation and Benefits Administration 2's decision to deny his adjudication request regarding his Mortgage Interest Differential (MID) claim and contended that article 8.3.12 of the Canadian Armed Forces Relocation Directive (CAFRD) was not being properly applied as he had met the two prerequisites to be entitled to the benefit. The grievor indicated that his Ottawa residence sold for significantly less than expected due to the decline in the market and that while he was able to port his interest rate of 1.57% on the original mortgage amount, he had to take out a second mortgage with an interest rate of 5.33% to complete the purchase of his Winnipeg residence. The grievor opined that the blended rate of the mortgages for his Winnipeg residence would be 2.01% and he argued that because this amount was higher than the 1.57% he had on the Ottawa residence, and because that mortgage was discharged, he met all the necessary criteria to be entitled to the MID benefit.

The Initial Authority denied the grievor redress as it was determined that because the mortgage interest rate on the principal outstanding balance at origin was ported at the same interest rate and applied to the mortgage at destination, no entitlement to the MID benefit existed.

The Committee found that the intention of article 8.3.12 of the CAFRD is to provide a benefit to members who are posted and required to sell their residence and purchase another residence at a time when interest rates have spiked. The MID benefit reimburses the difference between the higher and lower mortgage rates, up to a maximum consisting of the amount still owed on the mortgage for the sold residence. It does not cover the interest related to a higher mortgage for the replacement residence. As such, the Committee found that the grievor ported his mortgage on the remaining principal which was beneficial as the interest rate on that principal amount remained 1.57%. The fact that he had to accept an additional loan at a higher interest rate because the purchase price of the Winnipeg residence was higher than the sale price of the Ottawa residence did not create an entitlement to the MID benefit as the CAFRD does not provide for a blended interest rate, a blended mortgage or a combination of a first and second mortgage. The Committee found that the grievor was not aggrieved and recommended that the Final Authority not afford the grievor redress.