Mortgage lending conditions in Canada became significantly tighter during the first quarter of this year, according to the Senior Loan Officer Survey published by the Bank of Canada.
The new data report found 35.62% of Canadian financial institutions tightened their household mortgage lending standards during the quarter, the highest percentage in the Senior Loan Officer Survey’s six-year history of tracking the household lending. In comparison, only 11.63% of Canadian financial institutions tightened their non-mortgage lending standards.
“Unlike in the U.S., in Canada it appears to be households rather than businesses that are seeing the more widespread tightening of credit conditions,” said Andrew Grantham, a senior economist at CIBC, in response to the data.
However, Royce Mendes, managing director and head of macro strategy at Desjardins Capital Markets, observed that while “the balance of opinion still points to tighter conditions for business lending, but there’s probably a further move to come. While mortgage lending conditions have now tightened significantly, non-mortgage lending conditions are still only marginally tighter. That’s an area to watch should the economy slowdown in the months to come.”