The federal government’s relaxed mortgage rules unveiled this month will give first-time homebuyers a helping hand by lowering down payments and offering longerThat’s good news for homebuyers. It could be even better news for banks, which stand to benefit from surging demand for bigger loans that take longer to pay off., will raise the price cap for insured mortgages to $1.5-million, up from $1-million previously.
That’s because pricier homes, often out of reach of younger homebuyers in urban areas, may become more accessible once the changes take effect. Declining interest rates, which lower borrowing costs, could add a significant tailwind.homeowners. One thing is clear though: The smaller the down payment, the bigger the loan.
Though residential mortgages are among the lowest-margin loans offered by Canada’s largest banks because of their relatively low-risk nature, they account for a substantial 30 per cent to 40 per cent of their loan books. Canadian banks control about 75 per cent of the country’s mortgage market. By comparison, the average credit card and commercial loan growth among the Big Six banks was far brisker over this period, increasing by 13 per cent in both cases.