* . *
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Thursday, August 7, 2025
Earth-News
  • Home
  • Business
  • Entertainment
    Themed Entertainment Design – Purdue Polytechnic

    Innovative Themed Entertainment Design: Creating Immersive Experiences

    Rachael Leigh Cook and Brandon Routh ‘Happy to Have Found Each Other’ Following Respective Divorces – yahoo.com

    Rachael Leigh Cook and Brandon Routh ‘Happy to Have Found Each Other’ Following Respective Divorces – yahoo.com

    ‘Billie Jean’ – Hyde Park Herald

    The Enduring Magic Behind ‘Billie Jean’ Revealed

    Hank Hill returns to a changed world in new ‘King of the Hill’ episodes – New Haven Register

    Hank Hill Navigates a Bold New World in Thrilling New ‘King of the Hill’ Episodes

    Exclusive | Fox Takes Stake in IndyCar Owner Penske Entertainment – The Wall Street Journal

    Exclusive | Fox Takes Stake in IndyCar Owner Penske Entertainment – The Wall Street Journal

    Go-to entertainment: why gaming was made for the toilet – The Guardian

    Why Gaming Is the Ultimate Way to Pass Time in the Bathroom

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology

    Improved Technology Access: A Key to Closing the Healthcare Gap for African Americans – BIOENGINEER.ORG

    LMI Expands Technology Org, Appoints New Leaders – GovCon Wire

    LMI Expands Technology Team with Dynamic New Leadership Appointments

    Midland Innovation and Technology Charter School closing down – CBS News

    Midland Innovation and Technology Charter School Closes Permanently

    Future Trends In HR Technology – Dataconomy

    Future Trends In HR Technology – Dataconomy

    Nasdaq-listed Verb Technology to build $558 million TON treasury, rebrand as TON Strategy Co. – The Block

    Nasdaq-Listed Verb Technology to Build $558 Million TON Treasury and Rebrand as TON Strategy Co

    How Tech Firms Like Google and Meta Are Embracing the Military – The New York Times

    How Tech Firms Like Google and Meta Are Embracing the Military – The New York Times

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
  • Home
  • Business
  • Entertainment
    Themed Entertainment Design – Purdue Polytechnic

    Innovative Themed Entertainment Design: Creating Immersive Experiences

    Rachael Leigh Cook and Brandon Routh ‘Happy to Have Found Each Other’ Following Respective Divorces – yahoo.com

    Rachael Leigh Cook and Brandon Routh ‘Happy to Have Found Each Other’ Following Respective Divorces – yahoo.com

    ‘Billie Jean’ – Hyde Park Herald

    The Enduring Magic Behind ‘Billie Jean’ Revealed

    Hank Hill returns to a changed world in new ‘King of the Hill’ episodes – New Haven Register

    Hank Hill Navigates a Bold New World in Thrilling New ‘King of the Hill’ Episodes

    Exclusive | Fox Takes Stake in IndyCar Owner Penske Entertainment – The Wall Street Journal

    Exclusive | Fox Takes Stake in IndyCar Owner Penske Entertainment – The Wall Street Journal

    Go-to entertainment: why gaming was made for the toilet – The Guardian

    Why Gaming Is the Ultimate Way to Pass Time in the Bathroom

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology

    Improved Technology Access: A Key to Closing the Healthcare Gap for African Americans – BIOENGINEER.ORG

    LMI Expands Technology Org, Appoints New Leaders – GovCon Wire

    LMI Expands Technology Team with Dynamic New Leadership Appointments

    Midland Innovation and Technology Charter School closing down – CBS News

    Midland Innovation and Technology Charter School Closes Permanently

    Future Trends In HR Technology – Dataconomy

    Future Trends In HR Technology – Dataconomy

    Nasdaq-listed Verb Technology to build $558 million TON treasury, rebrand as TON Strategy Co. – The Block

    Nasdaq-Listed Verb Technology to Build $558 Million TON Treasury and Rebrand as TON Strategy Co

    How Tech Firms Like Google and Meta Are Embracing the Military – The New York Times

    How Tech Firms Like Google and Meta Are Embracing the Military – The New York Times

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
Earth-News
No Result
View All Result
Home General

Bank of Canada’s record tightening campaign exposes lenders’ mortgage risks

July 13, 2023
in General
Bank of Canada’s record tightening campaign exposes lenders’ mortgage risks
Share on FacebookShare on Twitter

Bank of Canada's record tightening campaign exposes lenders' mortgage risks
© Reuters. FILE PHOTO: A sign is pictured outside the Bank of Canada building in Ottawa, Ontario, Canada, May 23, 2017. REUTERS/Chris Wattie

By Nivedita Balu

TORONTO (Reuters) – The Bank of Canada’s interest rate hike on Wednesday and prospects of more increases heighten risks to mortgage lenders as homeowners are likely stay in debt longer as they struggle to make higher payments or pay even the interest portion of their home loans, investors and analysts say.

After urging lenders to tackle the risks from a sharp rise in borrowing costs, Canada’s main banking regulator, Office of the Superintendent of Financial Institutions (OSFI), on Tuesday proposed tougher capital rules for lenders to prevent consumers from defaulting or entering negative amortization.

Negative amortization occurs when variable home loan customers’ monthly repayments are not enough to cover the interest component of home loans. Which means the excess amount gets added to the outstanding loan, thereby lengthening the repayment period.

“All of that is a realization that there is stress in the system,” said Greg Taylor, Chief Investment Officer of Purpose Investments.

“There’s definitely more risk because anytime you hike you never know when it’s going to be the straw that breaks the camel’s back.”

Unlike the U.S., where home buyers can snag a 30-year mortgage, Canadian borrowers have to renew their mortgages every five years at the prevailing interest rates.

On Wednesday, the central bank pushed back its expectations for getting inflation to its 2% target by six months to mid-2025, in a sign interest rates are likely to stay higher for longer.

The cost of a floating rate mortgage has now increased by about 70% from the loans since October 2021, when interest rates hit at a record low, prompting more than half of home buyers took out floating rate loans. Analysts estimate some C$331 billion ($251 billion) in mortgages coming up for renewal in 2024 and C$352 the following year, which underscores the enormity of refinancing challenge.

To be sure, thanks to the strong employment and being stress tested at a higher rate, consumers are largely able to make their payments for now.

MORTGAGE DELINQUENCIES LOW

Latest data released during the quarterly earnings showed mortgage delinquencies for all banks were low.

Of the big six banks in Canada, Bank of Nova Scotia and National Bank of Canada (OTC:) do not offer mortgage extension, meaning the payment owed by the consumer goes up for each hike the BoC announces.

The two banks will be key for any early signs of stress as borrowing costs rise further. Analysts also warn the two banks risk losing mortgage market share due as their products offer less flexibility.

Scotiabank said it has been working with customers individually in the current rising rate environment. National Bank did not offer an immediate comment.

Bank of Montreal, CIBC and TD Bank each allow for negative amortization as rates rise.

More than three-quarters of people with variable-rate mortgages had already hit their trigger rate, according to Desjardins.

Royal Bank of Canada, the country’s biggest bank, does not offer negative amortization but its variable rate mortgage customers have already seen an increase in payments by as much as 40% to cover higher interest rates, KBW analyst Mike Rizvanovic said. While the other three banks have fully insulated their borrowers until the mortgage is renewed.

RBC did not offer an immediate comment.

Canada’s banking regulator’s latest proposal to increase capital requirements puts the most stress on CIBC depending on how much of the portfolio ultimately moves to a negative amortization, Rizvanovic said, adding that BMO and TD would face “a very manageable impact.”

CIBC did not offer an immediate comment.

Darcy Briggs, portfolio manager at Franklin Templeton Canada, said one of the key factors for “keeping persistent demand is mortgage forbearance.”

“If your monthly payment doesn’t change, consumer behavior doesn’t change so spending habits and patterns don’t change. So it is working counter to what the Bank of Canada is trying to accomplish,” Briggs added.

($1=1.3181 Canadian dollars)

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Investing.com – https://www.investing.com/news/economy/bank-of-canadas-record-tightening-campaign-exposes-lenders-mortgage-risks-3125018

Previous Post

U.S. PPI ahead, China trade data disappoints

Next Post

IMF sees ‘pockets of resilience,’ slowing momentum in global economy

‘Icy cool’: How Claudia Sheinbaum is navigating Trump’s new world order – Politico

Icy Cool’: How Claudia Sheinbaum Is Navigating the Challenges of a New Global Era

August 7, 2025
The U.S. Economy Is Stumbling Badly – Washington Monthly

The U.S. Economy Confronts Major Challenges Ahead

August 7, 2025

SM Entertainment revenue up, concert earnings flat – IQ Magazine

August 7, 2025
Has the Trump administration made America healthier? – EWG

Did the Trump Administration Improve America’s Health?

August 7, 2025
Keep party politics out of courtroom – Hungry Horse News

Protect Justice from Politics: Guaranteeing Fairness for Everyone in the Courtroom

August 7, 2025
A general rule on the organization of biodiversity in Earth’s biogeographical regions – Nature

Unveiling the Hidden Secrets of Biodiversity Across Earth’s Biogeographical Regions

August 7, 2025
Students visit Robinson Gardens for science fair – Beverly Press & Park Labrea News

Students Dive into Nature and Uncover the Wonders of Science at Robinson Gardens Fair

August 7, 2025
The Last Trip: A Husband’s POWERFUL Message After Unexpected TRAGIC Loss – RV Lifestyle

The Last Trip: A Husband’s POWERFUL Message After Unexpected TRAGIC Loss – RV Lifestyle

August 7, 2025

Improved Technology Access: A Key to Closing the Healthcare Gap for African Americans – BIOENGINEER.ORG

August 7, 2025
As youth sports grow more intense, some coaches and officials struggle with parent behavior – MPR News

As youth sports grow more intense, some coaches and officials struggle with parent behavior – MPR News

August 7, 2025

Categories

Archives

August 2025
MTWTFSS
 123
45678910
11121314151617
18192021222324
25262728293031
« Jul    
Earth-News.info

The Earth News is an independent English-language daily published Website from all around the World News

Browse by Category

  • Business (20,132)
  • Ecology (758)
  • Economy (782)
  • Entertainment (21,659)
  • General (16,331)
  • Health (9,821)
  • Lifestyle (791)
  • News (22,149)
  • People (782)
  • Politics (791)
  • Science (15,995)
  • Sports (21,278)
  • Technology (15,761)
  • World (764)

Recent News

‘Icy cool’: How Claudia Sheinbaum is navigating Trump’s new world order – Politico

Icy Cool’: How Claudia Sheinbaum Is Navigating the Challenges of a New Global Era

August 7, 2025
The U.S. Economy Is Stumbling Badly – Washington Monthly

The U.S. Economy Confronts Major Challenges Ahead

August 7, 2025
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

Go to mobile version