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TORONTO, Sept 1 - After a sharp rise in mortgage repayment terms over the past few quarters, Canadian banks' home loans past 30 years have edged lower in the latest quarter but analysts say risks remain elevated with borrowing costs expected to stay higher for longer.
The big six banks said they have called on struggling customers giving them the option to switch to fixed-rate products, increase term payments or make a lump-sum payment as they hit the trigger rate. CIBC's CFO Hratch Panossian told Reuters in an interview that about 8,000 clients had increased their monthly payments and just over 1,000 clients made lump-sum payments, to remove their mortgage from the negative amortization status, as a result of the outreach during the third quarter.Canada's total residential mortgage debt stood at C$2 trillion at the start of the year.
Scotiabank's Canada head Dan Rees said the bank was now being more"disciplined with regards to customer selection" for new mortgages. "The ones that adjust on renewal, they are just kicking the can down the road and the reset will be probably bigger when they renew."
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