Canadian banks need to take steps to assist mortgage holders who are struggling to stay above water after a rapid spike in interest rates, according to new guidelines issued Wednesday.
Canadian banks need to take steps to assist mortgage holders who are struggling to stay above water after a rapid spike in interest rates, according to new guidelines issued Wednesday.
Canadian banks have been seeing a rise in such negatively amortizing mortgages, with the expected time for a borrower to pay back the loan sometimes stretching past 30 years. At least one quarter of the Canadian mortgage portfolio at Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce are now in that category. And nearly a third of Royal Bank of Canada’s domestic borrowers are are covering their interest only, so their amortizations are extending too.
Oh boy… 😬 At these proportions, the banks don’t have a choice but to stretch the amortizations.
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Oh boy… 😬 At these proportions, the banks don’t have a choice but to stretch the amortizations.