top of page
  • Frank Tian

🏠 Canadian Mortgage Risk Update

Big 5 banks’ Q4 earnings reports are out.


Here is an update of the mortgage book. 👇


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


🟦 Big 5 have $1.3 trillion in Canadian mortgages.


🟦 73%~ are Uninsured: $970~ billion CAD.


🟦 Uninsured has less than 5% with FICO<650.


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


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


🟦 15%~ of the total mortgage balance is Condo.


🟦 13%~ of the total mortgage balance is Investment.



🟧 Special notes of variable rate mortgages:


📌 Scotia provides variable rate with variable payment.


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


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


📌 For the variable rate with fixed payment,


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


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


Sources: banks’ earning reports.

Recent Posts

See All

Auto Loan Update

🚗 How is the auto loan doing in 2023 so far? Everything is up. 🟦 Auto Price Up The new car price index continues to climb in May, +4.7% Y/Y. It has grown 21% since Feb 2020. Many models become luxu

Old Bank/Card Model Still On Fire

The Economist recently published a piece to highlight the resilience of credit cards in developed economies. In the US, the credit card balance dropped as much as 16% during the pandemic*, but has mad

Comentarios


bottom of page