Amid steady price growth, more and more Canadians are taking out multiple mortgages for their homes
![Over 15% of loans are for already mortgaged homes](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://ca.res.keymedia.com/files/image/iStock-673713772-debtmanagement-taxx-worryy-sadd-workingg-writee-business-financee.jpg)
With homes nationwide seeing sustained price increases over the past few years, Canadian home owners continuously strapped for cash have been forced to become creative in their financial management – and an increasingly popular method is taking out a loan for an already mortgaged home.
Data from the CMHC indicated that multiple mortgages on the same property accounted for 15.12% of originations in 2017. The market share of multiple mortgages increased by 4.16% annually from 2016.
In particular, Toronto has seen a significant upward spike in multiple mortgages, with 17.4% of originations in the city last year going to already mortgaged properties. This represented a 2.6% increase from the year prior, Better Dwelling reported.
Montreal was the second largest market of multiple mortgages last year, according to the CMHC. Increasing by 4% from 2016, multiple loans on the same property comprised 17.4% of new mortgages in the city last year, a similar proportion to that of Toronto.
Meanwhile, Vancouver – although the third largest market for this type of mortgage in Canada – actually saw the number of loans on already mortgaged homes fall by 7% from 2016, representing 18.1% of new mortgages in 2017.
Read more: Why were so many borrowers renewing with the same lender last year?
Paying off these debts and other products such as payday loans is expected to become a significant hurdle for Canadian borrowers in the near future, the CMHC stated in a separate report earlier this month.
Monthly housing payments have steadily increased amid rising interest rates and the larger debt loads accumulated during the past few years of record-low rates. The Crown corporation also warned that this might be just the beginning as interest rate growth is now normalizing.