MONTREAL: The rapid run-up in mortgages during the pandemic represents a “pocket of risk” to the financial system, but Canadian lenders are starting to get the problem of ultra-long home loans under control, according to the country’s bank watchdog.
“During the Covid years, the principal unintended consequence of what we went through was this buildup in mortgage underwritings,” Peter Routledge, who heads the office of the superintendent of financial institutions, said at a National Bank of Canada financial services conference in Montreal.
“That created a risk concentration, and that’s really worried us since it formed,” he said.
But he added: “This is a pocket of risk. I don’t consider this risk systemic, but it could lead to a period of uncertainty in the housing system.”
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