Two-thirds of non-bank residential mortgages are uninsured

Mario ToneguzziStatistics Canada reported Friday that non-bank mortgage lenders held 1.7 million residential mortgages in the fourth quarter of 2018, two-thirds of which were uninsured.

At the end of the fourth quarter of 2018, 1.7 million residential mortgages with a total value of $325.5 billion were outstanding, it said, adding that the uninsured mortgages outstanding contributed $188 billion (57.8 per cent) to the total value and 1.1 million (65 per cent) to the total number of mortgages provided by non-bank lenders.

“Uninsured mortgages outstanding had an average value of $170,031 per mortgage, lower than the average value of $230,827 per insured mortgage outstanding,” said the federal agency.

“Mortgages extended are the mortgages approved, issued and added to the balance sheet during the quarter. As a whole, non-bank mortgage lenders in Canada extended 152,554 residential mortgages totalling $39.3 billion in value during the fourth quarter of 2018. Of those, 93,197 were uninsured and they accounted for a total value of $22.8 billion. They represented 61.1 per cent of the total number of mortgages extended and 58.0% of the total value extended.”

The average value for uninsured residential mortgages extended was $244,617, again lower than that of insured mortgages extended ($278,537), it said.

StatsCan said mortgage loans are considered in arrears at the end of a quarter if payments are overdue. In the fourth quarter of 2018, 34,638 residential mortgages were in arrears by a day or more, for a total value of $6.4 billion. Of these, 21,641 (62.5 per cent) were uninsured, representing a value of $4 billion (62.4 per cent).

“Uninsured residential mortgages in arrears had an average value of $185,511, slightly lower than the average value of $185,732 of insured mortgages,” it said.

“Total residential mortgages in arrears represented two per cent of the total value and two per cent of the total number of outstanding mortgages. Of these mortgages in arrears, 4,249 were in arrears by over 90 days, for a total value of $930.4 million. Of these mortgages in arrears over 90 days, 2,524 (59.4 per cent) were uninsured, representing a value of $587.2 million (63.1 per cent).”

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