The head of Canada’s banking regulator says he is encouraged by the progress Canadian lenders have made in shortening mortgage amortization periods across their lending portfolios.
Over the course of the pandemic, mortgage originations soared by over 40% compared to pre-pandemic levels, with many borrowers taking rock-bottom variable-rate mortgages that came with fixed payments.
As interest rates soared, the interest portion of those payments also rose, in many cases reaching a trigger point that consumed the borrower’s total monthly payment, and pushing amortization periods well beyond 35 years in many cases.
But last week, Peter Routledge, head of the Office of the Superintendent of Financial Institutions (OSFI), reported that banks have made good progress in getting those amortizations back down to their original levels.
He noted that…
