Canadian Residential Mortgage Markets: Boring But Effective?
June 1, 2009
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Summary
Klyuev (2008) concluded that the Canadian market for housing finance is highly advanced and sophisticated, but financing options were somewhat limited, particularly at terms longer than five years. This paper argues that the paucity of longer-term loans is caused by a five-year maturity cap on government-guaranteed deposit insurance, and a prepayment penalty limit on residential mortgage loans in the Interest Act. That said, the availability and cost of residential loans for prime borrowers are comparable to those in the United States.
Subject: Banking, Covered bonds, Financial institutions, Insurance, Loans, Mortgages, Residential mortgages
Keywords: bank, bank lender, borrower mortgage accessibility, closed mortgage, cost comparison, covered bond, covered bond program, Covered bonds, Europe, fixed-rate mortgage, Fixed-Term mortgage rates, Housing, Insurance, loan, loan quality, Loans, mortgage, mortgage accessibility, mortgage insurer, mortgage market, mortgage rate, Mortgages, rate, rate lock-in, regulations, Residential mortgages, securitization rate, WP
Pages:
17
Volume:
2009
DOI:
Issue:
130
Series:
Working Paper No. 2009/130
Stock No:
WPIEA2009130
ISBN:
9781451872774
ISSN:
1018-5941
