Vancity Loan Payment Deferral Program

Loan Payment Deferral Program

During these uncertain times, we’re making sure no one is overly burdened. You may be able to defer your loan or mortgage for up to six months.

Am I eligible?

All members who’ve been impacted due to the pandemic are eligible for loan and mortgage deferrals.

Deferrals are only applicable for upcoming loan payments and your account must be in good standing.

Type of loan Defer up to
Loans 6 months
Only excludes Construction Mortgages
6 months
Creditlines / Lines of credit 6 months
Fair and Fast Loans 3 months

How do I apply?

Set up an appointment with us to discuss the available programs and options.

For Business Members, please call us Monday to Friday, 9 am to 5 pm at 604-648-5180 to discuss the available programs and options.

Frequently asked questions

How does it work? (Mortgages and Loans)

Loan payments are made up of both interest and principal, and are referred to as “blended payments”. Interest accrues daily. When a payment is made, the amount is first used to pay down interest which has accrued since the last payment. The leftover is applied to pay down the principal balance.

Over time as the principal balance goes down, the amount of interest which accrues between each payment also gets smaller. That means there’s more of the payment left to reduce the principal balance. The more time that passes where your principal balance doesn’t decrease, the more interest you’ll end up paying.

Example*: 5 Year Fixed Mortgage with a balance of $500,000, an interest rate of 3% and monthly payments of $2,500.

Using the example above, a regular monthly payment of $2,500 would comprise of $1,199 in interest and $1,301 in principal reduction.

Interest Only Payments
If you request interest-only payments on your loan for up to six months, you’ll have a lower payment to help manage your cashflow. Based on the example, your payment would be approximately $1,199 instead of $2,500. An important consideration would be that your principal balance would not decrease during this six month period which increases your cost of borrowing.

Payment Deferral
If you request a full payment deferral on your loan for up to six months, there would be no payment obligations during this period.

Interest will continue to accrue each day. Using the same example above, $1,199 in interest over six months will add up to approximately $7,194. This accrued interest will remain separate from the principal.

Once your payments resume, they’ll be applied to interest first and principal next, if any amount is left over. As interest continues to accrue, each payment you make will be applied towards the current and accrued interest until all accrued interest is paid off and your principal balance begins to decrease again (payments once again become “blended”).

Depending on your principal balance, interest rate and payment amount, the time it takes to catch up with accrued interest will vary. For the example above, the accrued interest would be fully caught up in six months. This means your principal balance would remain unchanged for a total of 12 months, increasing both your amortization period and your cost of borrowing.

*The above is for illustration purposes. Amounts are estimates only. Speak with an account manager to discuss your specific situation.

How does it work? (Line of credit)

With a line of credit or Creditline, you can access the funds anytime by withdrawing up to the credit limit. You can pay back the money you owe at any time. You typically have to pay a minimum payment each month, which is usually equal to the monthly interest.

If you request a payment deferral, the minimum monthly interest payments will be deferred on your line of credit. The more time that passes where you don’t pay the minimum interest and any balance owing, the more interest you’ll end up paying.

Example*: Creditline Mortgage with a limit of $100,000 and an annual interest rate of 3.05%. There is a balance of $50,000, with the remaining $50,000 that’s available credit. Each payment cycle is monthly.

Interest Payment Deferral
If you request an interest payment deferral on your line of credit for up to six months, there would be no payment obligation during this period.

Daily interest is calculated based on the balance owing of $50,000. That means $125 of interest is charged to the account at the end of the first cycle. At the beginning of the second cycle, the balance owing is now $50,125. No minimum payment is required during the deferral period.

For the second cycle, daily interest is calculated on the new balance owing of $50,125. At the end of the second cycle, $125.31 of interest is charged to the account. This process continues throughout the deferral.

In order to be eligible for an interest payment deferral, your line of credit will need enough available credit in order to continue deferring your interest payments. For example, if your balance is $99,999 of the $100,000 limit, you will be unable to defer your interest payments as it will go above your credit limit.

*The above is for illustration purposes. Amounts are estimates only. Speak with an account manager to discuss your specific situation.

Is it right for me?

We’re here to work with you to find the best option. Deferring payments can be beneficial in your current situation, but we also want you know what the impact will be in the long run.

Interest continues to accrue, and you are only deferring payment until a later time. It’s important to know that the interest is not waived and you will end up paying more interest over time.

The great news is if your situation changes, you can cancel your deferral at any time.

We’re here to support you as your trusted advisor. Set up a phone call with us if you need advice or have any questions. We’ll always take the time to run through the different scenarios so you can better understand what options make the most sense for your situation.

What can I expect once my deferral is over?

See the FAQ above called ‘How does it work?’ for an example scenario.

For personal loans and mortgages, when regular payments resume, you’ll have the option to keep payments as they were, increase payments or make a lump sum payment to catch up on the interest faster. You can catch up to your pre-deferral amortization schedule without incurring any penalties. Once you’re caught up, any additional payments would be subject to your loan’s prepayment penalty terms and conditions.

Set up an appointment with us to see how you can set yourself up for success in the long run with your loan and payments.

Not quite ready to have that conversation? Set up a calendar reminder to make an appointment with us for when your loan deferral ends.

What if I have a business loan?

If you’re in need of support due to the pandemic, we’re here to help. Vancity, government agencies and other organizations have introduced several solutions to help you navigate through this difficult time. Learn more.

If you’re looking at business loan options, make sure to have a discussion with your account manager. You can also call us Monday to Friday, 9 am to 5 pm at 604-648-5180.

What do I need to log in or set up Online Banking?

To log-in your Vancity account, you’ll need:

  • Member Card # (last 10-digits of your MEMBER CARD debit card)
  • Online Banking Password: If you don’t already have a password, call our Member Services Centre

If you’re logging in for the first time, you’ll need to log in using a desktop (laptop or PC) or the Vancity mobile app. You’ll be prompted to:

  • Create a new password
  • Accept the Account & Services Guide
  • Set-up 3 new Personal Access Questions and Answers
  • Watch a step-by-step video on how to log into online banking.

What are the next steps?

Your request will be processed in the next 2-7 business days.

You can confirm that it’s been processed by checking your loan under ‘Account Activity’ in Online Banking. At the top of the page, you can select ‘More Details’ where the ‘Next Payment Date’ will be updated. For personal loans, you’ll also receive a disclosure statement by mail.

Set yourself up for success

We’re here to support you. Get in touch to see if a loan deferral is right for you, or how to best navigate payment once the deferral ends.

Book an appointment

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