Mortgage demand expected to decrease says BoC survey

The Bank of Canada’s latest Senior Loan Officer Survey calls for a decrease in demand for high-ratio and low-ratio mortgages and HELOCs in the second quarter of 2018.

The survey reveals that in the first quarter, some lenders reported a decrease in demand due to regulatory changes (the B20 Guideline in particular) and rising interest rates. Others reported that the new rules had resulted in demand being ‘pulled-forward.’

Overall demand for low-ratio mortgages and HELOCs was slightly increased, while the trend for lower demand for high-ratio home loans, which started in the fall of 2016, continued.

Price conditions for mortgages tightened as lenders increased the spreads charged to borrowers in line with increased mortgage rates.

Overall household lending conditions tightened in the first quarter of 2018, the survey reports, driven by mortgage-related lending. Demand for auto loans also eased, decreasing the demand for non-mortgage credit in Q1, 2018.

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