As reported by the New Housing Price Index, the housing market remained strong in Canada in the second quarter and new home sales rose in many parts of the country, especially in the suburbs and satellite communities of Canada’s largest cities.
Mortgages extended are the mortgages approved, issued and added to the balance sheet during the quarter. The value of residential mortgage loans extended by non-banks grew by more than one-third (+36.5%) to $47.9 billion in the second quarter. At the same time last year, the value of mortgage loans extended grew by 25.4%. The total number of mortgages extended also rose by more than one-third (+35.7%) to 193,821 in the second quarter of 2020.
The growth in mortgages extended was likely driven by multiple factors, including low interest rates that incentivize mortgage refinancing, home re-mortgaging to generate income and increasing demand for larger homes during the pandemic.
Mortgages extended during the second quarter represented 14.5% of the total value and 11.4% of the total number of outstanding residential mortgages at the end of the second quarter, up from 10.6% and 8.4%, respectively, in the first quarter.
The average value of insured mortgages extended rose by $4,904 from the previous quarter to $266,960 in the second quarter, while the average value for uninsured mortgages declined by $1,220 to $234,351.
The majority of mortgages extended were uninsured (60.8%). The value of insured mortgages extended increased by 40.7% to $20.3 billion, while the value of uninsured mortgages extended grew by 33.6% to $27.6 billion. The number of insured (+38.1%) mortgages also grew at a faster pace than uninsured mortgages (+34.3%).