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Since the economic shutdown by COVID-19 two months ago, Canadian economy lost almost two million jobs in April, as the closure of retailers, restaurants and service businesses to stop the spread of COVID-19 left many Canadians with uncertain income and worried about how to keep up with payments.
The Bank of Canada quickly introduced a flurry of policies to ease the flow of money including slashing interest rates to 0.25% and intrducing $50 billion bond purchase program. Banks also stepped in to help Canadians to weather these uncertain times.
The country’s six largest lenders have deferred more than 10% of the mortgages in their portfolio so far, according to the report and they are allowing eligible customers to postpone mortgage payments for up to six months.
Currently, the mortgage default rate is at slightly more than 0.2%. If the rate peaks to 0.8% that would be roughly twice as high as its highest point during the financial crisis of 2009.
What can do you if you are not sure if your financials will improve despite new policies designed to help you make ends meet?
1. Contact your bank for available options
In a joint press release on March 17, 2020 the six major Canadian banks announced measures to support Canadians facing financial hardship due to COVID-19. These institutions have committed to offering immediate and flexible solutions to help Canadians manage challenges such as loss of income, childcare disruption or illness due to COVID-19.
2. Watch for government assistance
Both the fedral and provincial governments have committed to substantial financial measures to help individuals and small businesses. On March 18, Ottawa announced an $82 billion COVID-19 emergency response package that includes extended deadlines for tax filing and payment of income tax you owe;
Canada Emergency Response Benefit
Canada Emergency Student Benefit
Canada Emergency Wage Subsidy
3. Other Credit Options
Another common and much less expensive way to cover temporary dips in income is access to a line of credit.
Lines of credit typically come with interest rates higher than mortgage rates but are much lower than credit card rates. They also have flexible repayment terms such as interest only payments or minimum monthly payments.
Are you running out of options on your mortgage? Find your options here
4. Prepare yourself for next crisis
How many adverse events do you experience on your average day? Do you allow these events to consume your energy and mind or do you use them to make you stronger and even better prepared?
Crisis will never stop coming and it's only your preparedness and response-ability that will make the difference in your life.
Adversity Quotient was developed to test the unconscious pattern of how people respond to adversity, and show how to increase it and thereby, help individuals become resilient and protect themselves from any adverse effects whether it's monetary or emotional.