Personal Finance

Big banks charging customers interest on interest for deferred mortgage payments

  • Last Updated:
  • Apr 12th, 2020 4:20 pm
41 replies
Sr. Member
User avatar
Jan 19, 2007
935 posts
419 upvotes
Torontario
Banks have agreed to defer payments, not cancel nor forgive.

BoC initiated on Mar-16th buy-back process for CMB (aka MBS) from banks at ~$500M per week. I think it's managed by Blackrock.
This would only relieve the pressure from temporary non-payments off the banks books, but that's a finite game.

Forgiving payments would require a much bigger fiscal bailout.
Sr. Member
Mar 10, 2004
563 posts
171 upvotes
No. This type of "feature" has always been baked into any mortgage i ve seen to make the bank more money just the length of term is longer.
Sr. Member
Mar 10, 2004
563 posts
171 upvotes
And no i actually don t feel the mortgage holder. We have bigger problems.
Deal Addict
May 16, 2017
1291 posts
1538 upvotes
Why would anyone have expected anything different?
Deal Fanatic
User avatar
Nov 13, 2010
6693 posts
1223 upvotes
Scarborough
Banks will make their coin even after decades of billions and trillions in profits every quarter

They got no sympathy for anyone. Sad that there’s no nationalism here at all compared to other countries where organizations and charities and wealthy people are already helping the most vulnerable. Other than small token gestures there’s nothing but cerb and ei to go on
Sr. Member
Mar 10, 2004
563 posts
171 upvotes
apnayloags wrote: Banks will make their coin even after decades of billions and trillions in profits every quarter

They got no sympathy for anyone. Sad that there’s no nationalism here at all compared to other countries where organizations and charities and wealthy people are already helping the most vulnerable. Other than small token gestures there’s nothing but cerb and ei to go on
It s not about sympathy. Holding a mortgage for a home is not a right. It is an option. There are other options to keep a roof over your head. Some not so desireable.
Member
Jan 13, 2016
473 posts
257 upvotes
Vancouver, BC
I have mixed feelings about it. On the one handi wouldn't want to find i have 7000 added to my mortgage at the end of this pandemic on the other hand we don't live in a communist society and the banks are businesses. Therefore how much interference should government give. Also strong banks are good for our economy.
Deal Fanatic
Feb 4, 2015
5818 posts
2352 upvotes
Canada, Eh!!
Sheesh our financial institutions really know how to wring every cent even in pandemic times.

Just as bad as Tangerine that offered to help in these troubled times to only charge 10.99% interest on their credit cards. At least give one month at prime or even 0%.
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

2020: BOC dropped rates 3 times and MCAP waited and waited to drop its prime rate to include all 3 drops.
Sr. Member
Mar 10, 2004
563 posts
171 upvotes
georvu wrote: Sheesh our financial institutions really know how to wring every cent even in pandemic times.

Just as bad as Tangerine that offered to help in these troubled times to only charge 10.99% interest on their credit cards. At least give one month at prime or even 0%.
Be grateful that the banks are not calling in all those HELOCS?
Deal Addict
Oct 3, 2013
1141 posts
1460 upvotes
While I am sympathetic to those who are in challenging situations, my goodness are people ever entitled. Apparently if a pandemic hits, all financial responsibilities should disappear and be absorbed by the government and big corporations.

People are still complaining that CERB doesn't pay enough, didn't come out fast enough, was too complicated, etc. People complaining about banks still holding people responsible for their debt, etc. People complaining they shouldn't have to pay rent, get evicted, etc.... It doesn't end. Then, in a few years, when EI premiums and/or taxes increase to deal with all the debt, everyone will be up in arms again.

georvu wrote: Sheesh our financial institutions really know how to wring every cent even in pandemic times.

Just as bad as Tangerine that offered to help in these troubled times to only charge 10.99% interest on their credit cards. At least give one month at prime or even 0%.
If one is concerned about their interest rate, they should have protected themselves and considered a different credit product (i.e. LOC). It shouldn't be a surprise that if some circumstance changed in life, they'd be paying an insane amount of interest. No wonder I have to listed to dumb recording describing all the fees & interest rates every time I apply for a credit card on the phone. I'd consider 10.99% to be very generous - it's pretty much a 50% discount. Nobody is forcing them to use a credit card, are they?
Deal Addict
Apr 5, 2016
4364 posts
2938 upvotes
Calgary/Vancouver
tempperm wrote: It s not about sympathy. Holding a mortgage for a home is not a right. It is an option. There are other options to keep a roof over your head. Some not so desireable.
So true. In fact a whole religion bans the whole idea of financing a home, ironically because of situations like this can happen.
Current Fido and Rogers customer.
Ex Koodo customer.
Deal Addict
Apr 5, 2016
4364 posts
2938 upvotes
Calgary/Vancouver
georvu wrote: Sheesh our financial institutions really know how to wring every cent even in pandemic times.

Just as bad as Tangerine that offered to help in these troubled times to only charge 10.99% interest on their credit cards. At least give one month at prime or even 0%.
And who helps the financial institutions when right now they are suffering from an increase in defaults especially high risk debt like the credit cards you mentioned. The government is only giving so much to banks so the difference needs to be made up elsewhere. They are also deemed an essential service so they have to keep a number of branches and staff available.

You all think the banks keep the profits all these years. No one thinks of the fast dividends these banks issue every year? Banks are a major component of every pension plan out there. They pretty much finance your retirement and investments.
Current Fido and Rogers customer.
Ex Koodo customer.
Deal Fanatic
Feb 4, 2015
5818 posts
2352 upvotes
Canada, Eh!!
Phonophoresis wrote:
If one is concerned about their interest rate, they should have protected themselves and considered a different credit product (i.e. LOC). It shouldn't be a surprise that if some circumstance changed in life, they'd be paying an insane amount of interest. No wonder I have to listed to dumb recording describing all the fees & interest rates every time I apply for a credit card on the phone. I'd consider 10.99% to be very generous - it's pretty much a 50% discount. Nobody is forcing them to use a credit card, are they?
It's more the way they advertise it... why not say consider our LOC instead of saying look how wonderful we are with 10.99%. The LOC will for most folks be below 10.99%.
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

2020: BOC dropped rates 3 times and MCAP waited and waited to drop its prime rate to include all 3 drops.
Deal Fanatic
Feb 4, 2015
5818 posts
2352 upvotes
Canada, Eh!!
bomber17 wrote: And who helps the financial institutions when right now they are suffering from an increase in defaults especially high risk debt like the credit cards you mentioned. The government is only giving so much to banks so the difference needs to be made up elsewhere. They are also deemed an essential service so they have to keep a number of branches and staff available.

You all think the banks keep the profits all these years. No one thinks of the fast dividends these banks issue every year? Banks are a major component of every pension plan out there. They pretty much finance your retirement and investments.
Bank worker, eh.

The financial institutions are not suffering.

Nor are they required to pay dividends... alot which comes from superfluous fees but don't want to go OT.
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

2020: BOC dropped rates 3 times and MCAP waited and waited to drop its prime rate to include all 3 drops.

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