Canada introduces Mortgage Charter to support financially vulnerable borrowers facing higher interest rates
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The Canadian Mortgage Charter is a set of rules and expectations for how banks should treat financially vulnerable mortgage borrowers, including allowing payment deferrals and waiving fees.
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It aims to help borrowers struggling with higher interest rates avoid defaulting on their mortgages.
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Most of the rules already existed in guidance from the Financial Consumer Agency of Canada; reaching out to borrowers in advance of renewal is new.
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The charter defines a "vulnerable borrower" vaguely as someone facing "severe financial stress" and at risk of default. Banks determine who qualifies case-by-case.
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If banks don't follow the rules, borrowers can complain to the Financial Consumer Agency of Canada, which monitors compliance, but enforcement measures are unclear.