Survey of Non-Bank Mortgage Lenders, second quarter 2021
Released: 2021-12-02
Residential mortgage activity in Canada increased on both a yearly and a quarterly basis in the second quarter. Several housing market indicators remained at record high levels relative to previous years despite showing signs of deceleration compared with the first quarter of 2021.
Non-banks report increase in the value of residential mortgages extended in the second quarter
The value of the mortgages extended by Canadian non-bank mortgage lenders in the second quarter reached $72.1 billion, 50.5% higher than the value recorded in the second quarter of 2020. At $346.6 billion, the value of mortgages outstanding held by non-bank mortgage lenders at the end of the second quarter of 2021 exceeded the value held at the end of the same quarter last year by 4.7%.
Mortgages extended and held by non-bank lenders also registered increases relative to the first quarter, even though the Canadian Real Estate Association reported that home sales decreased in all three months of the second quarter of 2021. This may be because of the lag between the sale of a home and the transfer of the corresponding mortgage funds. From the first quarter to the second quarter of 2021, the number of mortgages extended rose by 90,266 (+47.1%), while the number of mortgages outstanding increased by 6,720 (+0.4%). Quarterly increases were also registered in the value of mortgages extended (+39.0%) and mortgages outstanding (+2.3%). Quarterly fluctuations in mortgages extended are in part attributable to seasonal variations in mortgage activity.
Share of uninsured mortgages continues to grow
Increases in the value of extended and outstanding mortgages were driven mainly by a strong growth in the value of uninsured mortgages. In the second quarter, the value of uninsured mortgages extended by non-bank lenders increased 69.3% over the second quarter of 2020, while that of insured mortgages rose by one-quarter over the same period. For mortgages outstanding held by non-bank lenders, the value of uninsured mortgages increased by 10.6% year over year, while that of insured mortgages decreased by 3.9%. Mortgages outstanding held by chartered banks displayed similar movements over the past 12 months: the value of uninsured mortgages outstanding increased 19.6%, while that of insured mortgages decreased 2.1% from the second quarter of 2020 to the same quarter in 2021.
In most of the quarters since data from the Survey of Non-Bank Mortgage Lenders became available, the value of uninsured mortgages extended has grown more than the value of insured mortgages extended. As a result, the share of uninsured mortgages out of the total value of mortgages outstanding has increased from 57.4% in the second quarter of 2019 to 62.6% in the second quarter of 2021.
Chart 1
Value of mortgages extended by quarter, insured and uninsured
The value of deferred mortgages registers further declines
The value of deferred mortgages continued its decline, falling by $1.0 billion (-15.0%) from the first quarter of 2021 to reach $5.9 billion in the second quarter. Since the second quarter of 2020, lenders have offered their customers the option to defer their mortgage payments to assist them with the financial challenges created by the COVID-19 pandemic. In the second quarter of 2020, payments of about 100,000 non-bank mortgages were deferred, but as employment recovered over the 12 months that followed, this number decreased to 23,992 non-bank mortgages in the second quarter of 2021.
The dollar share of mortgages in arrears for over 90 days reaches new low
From the first quarter to the second quarter of 2021, the value of non-bank mortgages in arrears for over 90 days fell $96.2 million (-11.1%). At $771.2 million, the value of these mortgages represented 0.2% of the total value of mortgages outstanding in the second quarter, the lowest this proportion has been since data from the survey became available. With respect to value, the share of arrears over 90 days relative to mortgages outstanding varies between lender types: in the second quarter of 2021, mortgages in arrears for over 90 days accounted for 0.5% of the outstanding mortgages held by other lenders, five times more than for credit unions (0.1%).
Among the 2,994 mortgages in arrears for over 90 days in this quarter, just over half (53.9%) were uninsured. However, because the average value of an uninsured mortgage in arrears for over 90 days ($320,451) was higher than that of an insured mortgage in arrears for over 90 days ($183,947), the value of uninsured mortgages made up more than two-thirds (67.1%) of the total value of mortgages in arrears for over 90 days.
Chart 2
Percentage of uninsured mortgages out of the total value of outstanding mortgages
For more information on housing statistics, visit the Housing Statistics Portal.
Note to readers
The Survey of Non-Bank Mortgage Lenders is a recent initiative to collect information at the national level. This initiative will help complete the overall picture of the residential mortgage market in Canada. Until recently, residential mortgage data from non-bank lenders were collected only by some organizations at the provincial level, for certain industries, and at varying levels of detail.
The survey covers non-bank residential mortgage lenders, such as local credit unions, mortgage finance companies, trusts, insurance companies, mortgage investment corporations and private lenders. The entities included are not only those that issue residential mortgages, but also those that purchase them.
Please refer to the Survey of Non-Bank Mortgage Lenders first quarter 2021 release for quarterly comparisons.
Some figures may not add up to 100% as a result of rounding.
Data are not seasonally adjusted.
Please note that no imputation was performed on the data in Table 2. This information should be associated with Table 1 with caution.
The data from the second quarter of 2019 to the second quarter of 2021 are available by request.
Definitions
Outstanding mortgages are the mortgage balances remaining on the lender's balance sheet as of the end of the quarter.
Mortgages extended are the mortgages approved, issued and added to the balance sheet during the quarter.
Mortgages in arrears are mortgage loans overdue at the end of the quarter.
Mortgages deferred are mortgages for which an agreement is in place between the lender and the borrower to pause or suspend a borrower's mortgage payments and other accommodations for a specified period of time. Statistics Canada began to collect data on deferred residential mortgages in the second quarter of 2020.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
Report a problem on this page
Is something not working? Is there information outdated? Can't find what you're looking for?
Please contact us and let us know how we can help you.
- Date modified: