Alain Lavoie

Recent mortgage market trends

• High inflation, rapidly rising interest rates and cooling housing markets across Canada have resulted in decelerating mortgage growth in 2022.
• Mortgage activity by non-bank lenders accelerated up until 2022Q3 and has now reached the pace of mortgage growth in the banking industry.
• Despite increasing worries around the ability of Canadians to make their mortgage payments on time, mortgages in arrears remained at low levels.
• Mortgage borrowers are opting for shorter-term fixed rate mortgages, with fixed-rate 5-year mortgages falling to less than 15% of new mortgages, and variable-rate mortgages dropping to less than 20% of new mortgages.

Housing finance research at a glance

• While demand surges, alternative lenders are lending more conservatively as the industry faces shifting investor appetite. Their risk profile remains at relatively low levels.
• A larger share of alternative loan mortgage borrowers are renewing their loans in this space as it is increasingly difficult to qualify for a conventional loan.
• Interest rate differences are not a significant source of inequality in the housing finance system.

CMHC