One of Canada’s largest mortgage lenders says that the new federal government mortgage rules will have a significant impact on one area of its lending.
Home Capital says that the rules will make it harder to profitably originate and fund low-ratio government-backed insured mortgages such as those offered under its rental property focused “Accelerator” program.
"Like all mortgage lenders, we are still assessing the full impact of the changes on borrower behaviour and the competitive landscape," said Martin Reid, President and Chief Executive Officer of Home Capital.
The lender estimates that its Accelerator originations could fall by as much as 60 per cent due to the rule changes, although it is not expecting a significant impact to its profits as the program is already a low margin product.
"As the effects become more clear, we will explore new business opportunities created by this shift. We believe that Home Capital's solid fundamentals, strong balance sheet and nimble, entrepreneurial strategy leave us well positioned to take advantage of any opportunities that result."
Home Capital says that the rules will make it harder to profitably originate and fund low-ratio government-backed insured mortgages such as those offered under its rental property focused “Accelerator” program.
"Like all mortgage lenders, we are still assessing the full impact of the changes on borrower behaviour and the competitive landscape," said Martin Reid, President and Chief Executive Officer of Home Capital.
The lender estimates that its Accelerator originations could fall by as much as 60 per cent due to the rule changes, although it is not expecting a significant impact to its profits as the program is already a low margin product.
"As the effects become more clear, we will explore new business opportunities created by this shift. We believe that Home Capital's solid fundamentals, strong balance sheet and nimble, entrepreneurial strategy leave us well positioned to take advantage of any opportunities that result."
