CMHC: Canadian home buyers can still manage debt effectively

CMHC: Canadian home buyers can still manage debt effectively

CMHC: Canadian home buyers can still manage debt effectively In the November 29 release of its Q3 2016 financial results, the Canada Mortgage and Housing Corporation said that home buyers still demonstrated a “strong ability” in managing debts effectively.
 
For the quarter ending September 30, Canadian households who held CMHC-insured mortgages exhibited an average credit score of 751 for transactional homeowner loans, along with an average gross debt service (GDS) ratio of 25.7 per cent.
 
Generating $331 million in net income from its mortgage loan insurance and securitization guarantee programs, the CMHC provided insurance for 127,991 mortgages nationwide, up 26.8 per cent year-over-year.
 
As of the end of Q3 2016, CMHC’s mortgage insurance business had $514 billion in total insurance-in-force, far below the Crown corporation’s legislated insurance-in-force limit of $600 billion. However, the overall arrears rate held steady at 0.32 per cent, representing 8,286 outstanding loans.
 
Meanwhile, new securities guaranteed for Q3 amounted to $43.1 billion, with $10.2 billion for CMB and $32.9 billion for market NHA MBS. The average equity Canadian home buyers hold increased to 34.8 per cent, from 34.4 per cent in Q2.
 
“Despite economic challenges in parts of the country, we continue to generate a positive return for all Canadians. What's more, our portfolio remains strong as evidenced by the increasing equity borrowers have in their homes and the downward trend of our arrears rate, among other factors,” CMHC chief financial officer Wojo Zielonka said.
 

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2 Comments
  • Geoff Lander 2016-12-01 10:45:07 AM
    I thought the recent rule changes were in part aimed at reducing taxpayer exposure relating to insured mortgages. This article would indicate that exposure has decreased within the market naturally without making changes. Could it be there were other, less transparent reasons for the implemented changes? Or perhaps its merely a coincidence that the changes severely reduced the monolines' competitive position relative to the big banks on a big chunk of the mortgage market.

    Hmmmm....
    Post a reply
  • Robbie Ryan 2016-12-01 12:00:36 PM
    When will the D of F come to the conclusion it's unsecured debt and car loans that are the biggest credit rusk. It's not mortgage default.
    Post a reply