Mortgage growth slows but debt remains at record highs

Mortgage

As of January 2023, residential mortgage debt in Canada stood at $2.08 trillion, an increase of 6% compared to January 2022, but the rate of growth slowed compared to recent years. Inflation, rapidly rising interest rates, and cooling housing markets across the country weakened consumer confidence in 2022, resulting in fewer consumers looking to purchase a property and, consequently, decelerating mortgage growth in Canada. This is according to the latest CMHC Residential Mortgage Industry Report (RMIR), which analyses the most recent trends in the residential mortgage industry. Despite slowing mortgage growth, Canadian households still face record levels of mortgage debt.

Tania Bourassa-Ochoa, Senior Specialist, Housing Research, CMHC (CNW Group/Canada Mortgage and Housing Corporation)

households to make their monthly debt payments,” said Tania Bourassa-Ochoa, Senior Specialist of Housing Research for CMHC. “Although mortgages in arrears remain low, they are a lagged indicator and in challenging financial situations, consumers will typically be delinquent on credit cards, lines of credit, or auto loans before mortgages. Increasing delinquencies for these credit products indicate a larger number of consumers are having difficulties with their debt payments.”

The latest RMIR also shows consumers are reacting to rising interest rates by choosing options to reduce their monthly debt servicing costs:

  • Borrowers are opting for shorter-term fixed-rate mortgages in expectation of decreasing interest rates in the future.
  • Fixed-rate 5-year mortgages fell to less than 15%, with many consumers opting for 2-3-year fixed rates, and variable-rate mortgages dropping to less than 20% of new mortgages.
  • With cost of debt being more expensive, fewer mortgage borrowers are applying for refinancing, as the data shows a 32% drop in refinances in 2022.
  • More borrowers are choosing longer amortization periods, meaning they will be paying down their homes over a longer period of time, but for the short-term reducing their mortgage payment.

Other articles from mtltimes.ca – totimes.ca – otttimes.ca

This image has an empty alt attribute; its file name is Dryer-machine-on-fire.jpg

Mtl Duct Cleaning and dryer vent cleaning answering all your questions

Facebook
Twitter
LinkedIn
Email
NFL

Revolutionizing sports with technology enhancing athletic performance

The integration of technology in sports is transforming the way athletes train and perform. From data analytics to virtual training environments, technological innovations are reshaping athletic performance. As these advancements continue to evolve, their impact on sports management and performance becomes increasingly significant. In today’s sports landscape, technology plays a pivotal role in enhancing both

flying private

Private Jet vs. First Class: Is flying private from Montreal worth it?

Flying private or choosing first class is a big decision. Both options offer comfort and luxury. But they differ in cost, convenience, and privacy. This article compares both choices for travellers leaving from Montreal. The goal is to help you decide which option suits your needs. Cost of Flying Private vs. First Class Private jets

safest cities

Why Montreal is one of the safest cities to visit in 2025

If you’re planning a trip to Canada, Montreal has been ranked the sixth safest cities to travel to in 2025, according to a recent report by insurance company Berkshire Hathaway. When you break it down, Montreal’s safety is a combination of aspects that makes this city a favourite destination among safety-conscious travelers. Here’s a look

dermal fillers

The ultimate guide to dermal fillers: Are they worth it?

For decades now, dermal fillers have remained the go-to treatment for fighting the signs of aging, such as lines, wrinkles, and sagging. Apart from these, they are also extensively used to elevate some facial features by adding contour and volume to areas like lips, cheeks, and chin. Although the average cost of a dermal filler

Winnipeg’s Bold Commerce announces new PayPal integrations

Winnipeg’s Bold Commerce announces new PayPal integrations

Bold Commerce has built on its existing long-standing relationship with financial services platform PayPal. The firm has announced that small and medium-sized enterprises (SMEs) in Canada currently using its OpenCart and Gravity Forms solutions will benefit from the integration of PayPal’s full payments suite. This includes digital wallets, Venmo, Fastlane, as well as its Buy

Mtltimes Subscription

The latest on what’s moving Montreal and the world – delivered straight to your inbox