Canadian banks are starting to see mortgage payment deferrals expire, and households resume payments. Canada’s Big Six banks reported Q3 earnings last week, which ended on July 31, 2020. Mortgages on payment deferrals have dropped by nearly a fifth in the latest quarter. While that doesn’t tell us how many people actually needed the deferral, it does bring the market closer to finding how many do.

Canadians Have Over 510,000 Mortgages On Payment Deferral At The Big Six

Canada’s Big Six are seeing deferrals expire, and people resume payment on tens of thousands of mortgages. There were 510,530 mortgages on payment deferral at the Big Six at the end of Q3, down 17.53% from the previous quarter. The mortgages are worth $136.27 billion, down 15.38% from Q2. How this number drops is important to understand, since not everyone took a deferral because they needed it.

Only One Bank Saw The Number Of Mortgages On Deferral Increase

In terms of account numbers, all but one bank is seeing fewer mortgage deferrals. RBC has the most with 138,830 mortgages on payment deferrals in Q3, down 30.18% from the previous quarter. TD holds the second most at 107,000 mortgages deferred, down 15.08% from the previous quarter. Scotiabank is the only bank to see an increase to 99,000 mortgages deferred in Q3, up 5.32% from the previous quarter. RBC having the most mortgages on payment deferrals isn’t particularly noteworthy for the largest bank. Scotiabank seeing an increase while everyone else is seeing declines is a little odd.

Canadian Mortgage Deferrals At Major Banks

The number of mortgage accounts on payment deferrals at Canada’s Big Six banks.

Source: Bank filings, Better Dwelling.

The Mortgages On Payment Deferral Are Worth $136.27 billion

The value of the mortgages on payment deferral at the Big Six is falling as well. Royal Bank had the most adding up to $41.27 billion in Q3, but was down 23.66% from the previous quarter. CIBC has the second most with $33.30 billion on deferral, down 6.20% from the previous quarter. Bank of Montreal is the only one to see an increase to $17.25 billion on deferral, up 0.52% from the previous quarter. The increase is relatively minor, but considering BMO is seeing fewer accounts on deferral – this means bigger mortgages were asking for relief.

Value of Canadian Mortgage Deferrals At Major Banks

The value of mortgage accounts on payment deferrals at Canada’s Big Six banks.

Source: Bank filings, Better Dwelling.

The declines in mortgages on payment deferrals is expected, and doesn’t quite tell us as much as people likely hope. Deferrals were granted to a number of households that didn’t actually need them. They were also granted for varying lengths, from one to six months. As these deferrals expire, a more clear picture of how many households are distressed will actually emerge.

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