Question Period Note: MORTGAGE CHARTER

• Canadians work hard to be able to afford their home, and higher interest rates are leaving many people concerned about their increasing mortgage payments.
• The government is taking action in the 2023 Fall Economic Statement to support homeowners by introducing the new Canadian Mortgage Charter.
• The Charter reaffirms the government’s expectations around mortgage relief for borrowers at risk, and how they are to be supported by their financial institutions through difficult times.
• Mortgage holders in financial difficulty on their principal residence can expect to receive fair, reasonable, and timely mortgage relief measures.
• The Charter includes relief such as waiving fees and costs for borrowers accessing relief measures, and allowing temporary extensions of the mortgage amortization period for borrowers at risk.
• The Charter will support more Canadians through the temporary financial stress caused by elevated interest rates and help them to stay in their homes.
• The government will continue to closely monitor financial institutions’ implementation of and compliance with mortgage relief measures.

• The new Canadian Mortgage Charter reinforces existing federal guidance and policies around mortgage relief by setting out expectations for mortgage holders and financial institutions in six areas:
o Allowing temporary extensions of the amortization period for mortgage holders at risk;
o Waiving fees and costs that would have otherwise been charged for relief measures;
o Not requiring insured mortgage holders to requalify under the insured minimum qualifying rate when switching lenders at renewal;
o Contacting homeowners four to six months in advance of their mortgage renewal to inform them of their renewal options;
o Giving homeowners the ability to make lump sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties; and
o Not charging interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.
• The Charter reaffirms and should be read together with the Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances, which was issued by the Financial Consumer Agency of Canada (FCAC) in July 2023 after being announced in Budget 2023.
• The FCAC Guideline sets out expectations for federally regulated financial institutions to establish and implement effective mortgage relief policies and procedures that adhere to the principles of fairness, appropriateness, and accessibility. It assists financial institutions in adopting fair and consistent approaches when offering relief measures to Canadian consumers.

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