Mortgages in 2023 a recap ...

Mortgages in 2023 a recap ...

A new normal for Canadians: The way of mortgages today


With interest rates and inflation rising high over the last few years, Canadians have gone through some tough times — to the point that many are holding their real estate plans, whether buying or selling.

Although the Bank of Canada announced its final rate hold of 2023 earlier this month, the mortgage industry has already changed with the 10 rate hikes since March 2022. Here’s what’s happened.

Different lender types and loan terms

The market share of non-traditional lenders (non-bank mortgage lenders, mortgage investment entities and other chartered banks) has increased, as the usual big six Canadian banks (TD, Royal Bank, Bank of Montreal, Scotiabank, CIBC and National Bank) experienced a drop of 5.9 per cent of newly extended mortgages in 2023’s first quarter. However, they still hold the largest portion of outstanding mortgages.

Statistics Canada reports that non-bank mortgage lenders enjoyed a 1.9 per cent boost while mortgage investment entities an increase of 2.9 per cent.

New and refinanced mortgages from chartered banks went down by 44 per cent and 34 per cent, respectively, compared to 2022, CMHC reports. This is thanks to declining interest in the real estate market earlier this year from 2022 activity before interest rate hikes began.

To deal with higher monthly mortgage payments, many homeowners re-amortized their loans — to the point that two out of three mortgages in the first half of 2023 had amortization periods over 25 years (in 2022, it was one in two).

Fixed-rate mortgages still favoured

Whether renewing an existing mortgage or starting a new one, homeowners continue to prefer fixed-rate mortgages, which is currently more affordable than their variable-rate counterparts.

It’s thought that homeowners are starting to accept that higher rates aren’t changing anytime soon, which is causing mortgage holders to lock into fixed rates and at least have some certainty, which is important to homeowners. “Bank of Canada officials are helping to ingrain this, telling Canadians to brace for an era of higher borrowing costs,” analysts say, as Zoocasa reports.

CMHC reports that over the first two-thirds of this year, $244.5 billion was lent for new and renewed fixed-rate mortgages — a contrast to the $20.4 billion lent for variable-rate mortgages. 

The Saskatchewan REALTORS® Association (SRA) IDX Reciprocity listings are displayed in accordance with SRA's MLS® Data Access Agreement and are copyright of the Saskatchewan REALTORS® Association (SRA).
The above information is from sources deemed reliable but should not be relied upon without independent verification. The information presented here is for general interest only, no guarantees apply.
Trademarks are owned and controlled by the Canadian Real Estate Association (CREA). Used under license.
MLS® System data of the Saskatchewan REALTORS® Association (SRA) displayed on this site is refreshed every 2 hours.