This continued a streak of negative numbers first observed in mid-2017
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The nation’s insured mortgage balance has suffered its largest annual decline in years, according to data from the Bank of Canada.
As of January, outstanding insured mortgage debt shrunk by 9.37% year-over-year in January, down to $456.35 billion. This also represented a 1.35% monthly decline.
“The balance has been on the decline for a few years now, but they are getting larger,” Better Dwelling stated in its analysis of the BoC numbers.
“The 9.37% is the third consecutive month losses have intensified. The balance has been printing negative numbers since mid-2017.”
Insured borrowers vastly preferred terms lasting five years and longer, with 51.5% of the total insured balance represented by this product type. Borrowers in this category also paid an average interest rate of 2.93% as of January, versus the average of 3.01% for all insured debt.
Variable rate borrowers accounted for the second largest cohort, accounting for 19.8% of total insured balance. Their interest rate stood at an average of 3.35% in January.
Borrowers with terms lasting three to five years represented the third largest portion of insured mortgages, reaching 17.5%. The average interest rate was 2.86%, which Better Dwelling reported to be the lowest of any segment.
CMHC’s First-Time Home Buyer Incentive newly introduced last month includes a provision that “participants’ insured mortgage and the incentive amount cannot be greater than four times the participants’ annual household incomes,” which is expected to further impact future readings.
