CMHC is offering brokers more evidence that mortgage debt remains in check, its latest report confirming that lenders used only half of the backup money the government set aside to buy their mortgages during the recession.
Starting in 2008, the federal government set aside $125 billion for its Insured Mortgage Purchase Program, focused on buying CMHC-insure mortgages from banks, mono-lines and other mortgage lenders and so freeing up their funds for additional lending.
But according to the Canadian Housing Observer, a comprehensive CMHC report on the state of Canadian market, only about 55 per cent of those funds were pressed into service.
The report, released last week, also highlights the growth in credit debt, with total household credit debt increasing 5.5 per cent between 1991 and 2000 and by another 9.3 per cent in the 2001-2010 period.
For brokers, it suggests that mortgage growth was actually held within the government`s own projected constraints, even before the last round of mortgage rule changes and the Central Bank`s move to usher in the lowest interest rates in Canadian history.
Consumer credit debt did not show the same kind of restraint, with many brokers suggesting the federal government should, in fact, focus on tightening up rules around that kind of lending rather than bringing in additional mortgage rule changes.
There is in fact growing speculation that escalating household debt levels will nonetheless encourage the federal government to further tighten those mortgage rules.
Top bankers are now sounding that alarm following new national debt numbers released in December.
Both mortgage and consumer credit debt spiked in the third quarter of last year, increasing to $1 trillion and $448 billion, respectively, according to a StatsCan. Those individual debt levels increased even as personal disposable income remained unchanged.