As of January of this year, residential real estate loans in Canada totalled approximately $2.07 trillion. On top of this there's another $350 billion in home equity lines of credit. This brings total loans secured by residential real estate in this country to about $2.42 trillion.
What this chart really shows, though, is how concentrated the mortgage market is. The "big six" banks make up about 74% of the market. If you include Desjardins, the total increases to 80%. That's pretty much the market.
A few weeks ago, Equitable Bank launched a new construction financing product for laneway homes and garden suites in Canada. Here is the announcement. This is generally good news. When we completed Mackay Laneway House back in 2021, the banks hadn't yet gotten their head around this housing type. I remember RBC getting tripped up on the fact that there were two detached dwellings on the same residential lot.
That said, there are some important conditions around this new mortgage product:
"The Laneway House Mortgage is offered on properties that are free and clear, or in combination with new or existing mortgages where Equitable Bank holds, or will hold, the first position."
As of January of this year, residential real estate loans in Canada totalled approximately $2.07 trillion. On top of this there's another $350 billion in home equity lines of credit. This brings total loans secured by residential real estate in this country to about $2.42 trillion.
What this chart really shows, though, is how concentrated the mortgage market is. The "big six" banks make up about 74% of the market. If you include Desjardins, the total increases to 80%. That's pretty much the market.
A few weeks ago, Equitable Bank launched a new construction financing product for laneway homes and garden suites in Canada. Here is the announcement. This is generally good news. When we completed Mackay Laneway House back in 2021, the banks hadn't yet gotten their head around this housing type. I remember RBC getting tripped up on the fact that there were two detached dwellings on the same residential lot.
That said, there are some important conditions around this new mortgage product:
"The Laneway House Mortgage is offered on properties that are free and clear, or in combination with new or existing mortgages where Equitable Bank holds, or will hold, the first position."
they want sufficient equity in the property -- but Equitable Bank needs to hold the mortgage. I suspect that most of the people who have built laneway and garden suites have done so by leveraging the equity in their main house; so I'm not sure how "innovative" this product will end being in practice. You'll also need to switch to Equitable Bank if you have your mortgage with another lender.
Still, if you're looking to build one of these homes -- and I continue to believe that they make a ton of sense both financially and from a city-building standpoint -- it wouldn't hurt to see what Equitable Bank can offer.
an interesting chart from the WSJ
showing total home equity cashed out in the United States by quarter. What is clear is that the US is nowhere near its pre-2008 peak in terms of total dollars. However, if you look at the percentage of homeowners who refinanced their home in 2018 and took out cash
at a higher interest rate
, it was nearly 60% of all refis. This is up in the pre-2008 territory and it's about 3x more than the average from 2009 to 2017.
Now, you could argue that this is a fairly rationale outcome after a long period of economic expansion and home price appreciation. And interest rates were, on average, even lower in the 2012 to 2016 period. But, the WSJ posits that this could be a signal that people simply need the cash -- which is why the majority are willing to accept a higher interest rate. Here is another chart from a different WSJ article:
Housing debt (mortgage balances) has come way down since 2008, but non-housing debt has come way up and now exceeds that of the former. Non-housing consumer debt rose by about $1 trillion in real dollars from 2013 to 2019, principally driven by student loans and car loans. Noteworthy is the fact that student loans are rising fairly linearly (along with dramatically), whereas car loans and credit card debt seem to follow the overall economy.
When people are feeling richer (and confident about their economic prospects) they go out and buy things, like cars.
they want sufficient equity in the property -- but Equitable Bank needs to hold the mortgage. I suspect that most of the people who have built laneway and garden suites have done so by leveraging the equity in their main house; so I'm not sure how "innovative" this product will end being in practice. You'll also need to switch to Equitable Bank if you have your mortgage with another lender.
Still, if you're looking to build one of these homes -- and I continue to believe that they make a ton of sense both financially and from a city-building standpoint -- it wouldn't hurt to see what Equitable Bank can offer.
an interesting chart from the WSJ
showing total home equity cashed out in the United States by quarter. What is clear is that the US is nowhere near its pre-2008 peak in terms of total dollars. However, if you look at the percentage of homeowners who refinanced their home in 2018 and took out cash
at a higher interest rate
, it was nearly 60% of all refis. This is up in the pre-2008 territory and it's about 3x more than the average from 2009 to 2017.
Now, you could argue that this is a fairly rationale outcome after a long period of economic expansion and home price appreciation. And interest rates were, on average, even lower in the 2012 to 2016 period. But, the WSJ posits that this could be a signal that people simply need the cash -- which is why the majority are willing to accept a higher interest rate. Here is another chart from a different WSJ article:
Housing debt (mortgage balances) has come way down since 2008, but non-housing debt has come way up and now exceeds that of the former. Non-housing consumer debt rose by about $1 trillion in real dollars from 2013 to 2019, principally driven by student loans and car loans. Noteworthy is the fact that student loans are rising fairly linearly (along with dramatically), whereas car loans and credit card debt seem to follow the overall economy.
When people are feeling richer (and confident about their economic prospects) they go out and buy things, like cars.
