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  • Frank Tian

๐Ÿ  Canadian Mortgage Risk Snapshot - Q4 '22

Big 5 banksโ€™ Q4 earnings reports are out.


Here is an update of the mortgage book. ๐Ÿ‘‡


It is a very Rough estimate, as each bank reports different metrics.


๐ŸŸฆ Big 5 have $1.3 trillion in Canadian mortgages.


๐ŸŸฆ 73%~ are Uninsured: $970~ billion CAD.


๐ŸŸฆ Uninsured has less than 5% with FICO<650.


๐ŸŸฆ Uninsured has less than 1% with a low FICO / high LTV ratio (FICO<650 and LTV>75%).


๐ŸŸฆ 1% of the total Uninsured is $10~ billion CAD.


๐ŸŸฆ 15%~ of the total mortgage balance is Condo.


๐ŸŸฆ 13%~ of the total mortgage balance is Investment.



๐ŸŸง Special notes of variable rate mortgages:


๐Ÿ“Œ Scotia provides variable rates with variable payments.


Its consumers with variable rate/variable payments have 36% more deposits vs. those with fixed rates.


It seems the extra financial cushion gave those consumers the confidence to choose variable rate/variable payment.


๐Ÿ“Œ For the variable rates with fixed payments,


The payment will reset at renewal or re-underwritten with 25 years of amortization.


Hopefully the additional time would allow consumers who have reached trigger rates to grow their income.



Sources: banksโ€™ earning reports.


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