Huge amounts of deposit and low interest rates are the primary reasons why the big Canadian banks are perpetually winning the mortgage wars against the small lenders, says a Bank of Canada report that has been cited in news item by the CanadianMortgageTrends.com last December 24.
 
The established banking leaders count as their main resource for mortgage funding the total amount of deposits from their members, which can compose as much as 65 percent of each bank’s assets and liabilities.  Adding to this advantage is the willingness of said members to accept a lower interest rate on their deposits.
 
As a result,  small lenders  find it hard to compete against these advantages.  The support that they receive from the Canada Mortgage Bond (CMB) is not sufficient.  Only the annual amount of $1 billion of a five-year mortgage funding through the CMB is made available to them.  The small lenders also have to take on the full costs of other expenses such a legal  expenses, underwriting costs, and accountabilities incurred by credit enhancements.
 
Because of these reasons, the leading Canadian banks will always have an upper hand over their smaller counterparts when it comes to “the mortgage wars.”

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