Uninsured mortgages climb

April 7, 2018

Canada’s uninsured mortgage market reached an eight-year high in January as government steps to reduce its exposure to the housing market gained traction, according to data from the country’s banking regulator the Office of the Superintendent of Financial Institutions.
Mortgages that don’t require homeowner insurance surged 19 per cent from a year ago, accounting for about 53 per cent of the $1.13 trillion of home loans at Canada’s federally regulated banks. Insured home loans fell 6.5 per cent from a year ago.
Uninsured mortgages have taken an increasing share of the nation’s housing loans since 2012 as the government moved to reduce the chances of the kind of taxpayer-funded bank bailouts that happened after the U.S. housing crash a decade ago.                 
Still, the slowdown of residential mortgage volumes continues, with banks posting a 5.3 per cent increase from January 2017, down from a high of 6.6 per cent in May 2017. The trend reflects the sentiments of executives of Canada’s major banks, who have commented on a cooling mortgage market in recent weeks after reporting earnings results for the first quarter.