(OTTAWA) Canada’s financial consumer watchdog is warning lenders not to take advantage of Canadian mortgage holders who are facing serious financial hardship as interest rates and the cost of living rise.
The Financial Consumer Agency of Canada (FCAC) says financial institutions need to help provide support to consumers facing increased mortgage payments.
Holders of variable rate mortgages have faced a higher cost of borrowing as interest rates have risen, while those with fixed rate mortgages are facing increased costs as their mortgages need to be renewed.
In the guideline released today, the federal body did not recommend any specific measures, but stressed that lenders should be guided by the principles of fairness, appropriateness and accessibility.
This includes considering waiving prepayment penalties, waiving internal fees and costs, not charging interest on interest, and extending the amortization period.
FCAC says lenders should avoid taking advantage of subprime borrowers renewing their mortgage by offering lower rates based on their inability to adjust their mortgage credit agreement or switch to other lenders.
