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Weekly Economic Letter

5

0

A look at the Canadian mortgage market

Tue, Nov 10 2009, 06:34 GMT
by Economic and Strategy Team

National Bank of Canada


Summary

  • The Canadian mortgage market has undergone a radical transformation over the past 50 years. Prior to 1954, banks were not allowed extending mortgage loans. By August 2009, they held roughly 49% of all residential mortgages.

  • Historically, the 5-year fixed-rate loan has been the workhorse of the Canadian mortgage market. This segment of the marketplace, too, has changed significantly over the years.

  • In Canada, mortgage insurance plays a major role in the system. CMHC is the dominant provider of such insurance in the country.

  • In July 2008, the Government of Canada announced adjustments to the rules for government-guaranteed mortgages in order to reduce the risk of a U.S.-style housing bubble developing this side of the border.


Archive

National Bank of Canada  | 1100 University, 11th floor Montreal (Québec) H3B 2G7
http://www.nbc.ca/ | info@nbc.ca

Legal disclaimer and risk disclosure

This presentation may contain certain forward-looking statements about the 2009 Economic and Financial Outlook. Such statements are subject to risk and uncertainties. Actual results may differ materially due to a variety of factors, including legislative or regulatory developments, competition, technological change and economic conditions in Canada, North America or internationally. These and other factors should be considered carefully and readers should not rely unduly on National Bank of Canada’s forward-looking statements. This presentation may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express consent of National Bank.

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