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After the Mortgage Deferral Ends – How to Keep Up with the Payments

Many lending institutions rushed to help when COVID-19 impacted the economy and affected jobs. One of the lines of assistance were mortgage deferrals.
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When a mortgage deferral is in place, the homeowner does not have to pay the principal and interest for a set number of months. However, during the deferral interest continues to accumulate and is added to the mortgage balance at the end of the deferral period. While a great way to achieve short-term relief and free up cash for more pressing expenses such as food and bills, homeowners must understand that the mortgage payments will be a little higher after the deferral, and that they will pay more interest over the life of the mortgage.

For many, this short-term cash flow solution was ideal, giving them a way to cope financially while they waited to return to work. For others, the economic fallout of COVID-19 persists and they need additional options for cash flow now that the mortgage deferral period is ending.

One way to create additional financial relief is to get a secured personal loan. easyfinancial recommends a loan over a home equity line of credit (HELOC). The difference between a secured personal loan and a HELOC is this: a loan is a set amount with a set interest rate and set monthly payments. A HELOC is revolving credit – as soon as you make a payment, that sum becomes available to you to borrow again, which causes the monthly payments to fluctuate and can spur unnecessary spending. You can pay off a secured personal loan, but it is very easy to continually max out a HELOC.

Another solution that allows for better budgeting is a debt consolidation loan. This is ideal for homeowners that may have missed payments, that have mounting expenses, or that have debt they are struggling to manage. A debt consolidation loan takes a number of loans and debts owed by homeowner and combines them into one debt payment with a lower interest rate. Not only does the homeowner save a significant amount over the months thanks to the lower interest, having just one loan payment to make greatly improves cash flow.

A secured personal loan, debt consolidation loan, and other strategies used to manage short-term cash flow work best when homeowners also leverage other tools such as budgeting, saving, and being financially savvy.

This is easier said than done.

Money management is a skill and skills are learned. The way we behave with and manage money is also largely influenced by the examples we have seen growing up. If your parents treated money in a casual way, or took on significant debt, for example, you may have grown up thinking this was normal. If you have heard all your life that the only way to get ahead is to assume consumer debt outside of a mortgage and vehicle loan, again, you may feel that “everybody does this.” Without financial resources and education, many people are unaware of the options available. Homeowners in all situations, be they in need of a secured personal loan or a debt consolidation loan, or if they are able to easily make their payments, benefit from knowing what financial resources help them spend wisely and save more.

“During these uncertain times, more Canadians are facing financial challenges. Canadians facing financial challenges due to COVID-19 can now find relevant information to help them manage their debt and expenses in our COVID-19 Resource Centre on goeasy Academy,” says Andrea Fiederer, Executive Vice President & Chief Marketing Officer. “With goeasy academy, Canadians can access to hundreds of free articles, videos and tools all in one place. Plus, with recommendations, downloadable eBooks and a dedicated COVID-19 resource center, Canadians can start improving their financial literacy and taking control of their financial future today.”

easyfinancial is committed to helping Canadians be more financially savvy, and to helping struggling Canadians get the debt relief they need. Visit easyfinancial’s financial resource centre to get the financial resources you need, and to learn more about getting a secured personal loan or debt consolidation loan.

For more information, visit us at your local branch or online at