A report from the CMHC shows that mortgage borrowing is supported by borrowers with better credit scores (83% excellent or good) and defaults remain low as the share of mortgages borrowed by those with poor credit scores declines.
The share of mortgages considered bad loans fell in the first quarter of 2017 to the lowest level since the second quarter of 2014; just 0.11% of all mortgage loans were written-off in the quarter with an average balance of $80,265.
Based on Equifax data at the end of the first quarter of 2017, the newly-released Mortgage and Consumer Credit Trends report highlights an 11.7% year-over-year decline in new mortgage originations to 179,000.
“While rising levels of household debt continue to be a concern for Canada’s housing and financial stability, our monitored indicators show that mortgage holders are managing their overall debt generally well. Nonetheless, some signs of vulnerability are being observed; mostly among non-mortgage holders,” commented Maxim Armstrong, manager housing indicators and analytics, CMHC.
The full report is available on the CMHC website.
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Canadian homebuyers may be taking out larger mortgages due to rising home prices but they continue to manage their debt well.