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Canadian Residential Mortgage Markets; Boring But Effective?


  • John Kiff


Klyuev (2008) concluded that the Canadian market for housing finance is highly advanced and sophisticated, but financing options were somewhat limited, particularly at terms longer than five years. This paper argues that the paucity of longer-term loans is caused by a five-year maturity cap on government-guaranteed deposit insurance, and a prepayment penalty limit on residential mortgage loans in the Interest Act. That said, the availability and cost of residential loans for prime borrowers are comparable to those in the United States.

Suggested Citation

  • John Kiff, 2009. "Canadian Residential Mortgage Markets; Boring But Effective?," IMF Working Papers 09/130, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:09/130

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    References listed on IDEAS

    1. Keith P. Sharp, 1986. "Mortgage Rate Insurance in Canada," Canadian Public Policy, University of Toronto Press, vol. 12(3), pages 432-437, September.
    2. Freedman, C., 1998. "The Canadian Banking System," Technical Reports 81, Bank of Canada.
    3. Harris, Richard & Ragonetti, Doris, 1998. "Where Credit is Due: Residential Mortgage Finance in Canada, 1901 to 1954," The Journal of Real Estate Finance and Economics, Springer, vol. 16(2), pages 223-238, March.
    4. Paul S. Mills & John Kiff, 2007. "Money for Nothing and Checks for Free; Recent Developments in U.S. Subprime Mortgage Markets," IMF Working Papers 07/188, International Monetary Fund.
    5. Vladimir Klyuev, 2008. "Show Me the Money; Access to Finance for Small Borrowers in Canada," IMF Working Papers 08/22, International Monetary Fund.
    6. Karen M. Pence, 2006. "Foreclosing on Opportunity: State Laws and Mortgage Credit," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 177-182, February.
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    Cited by:

    1. Rocco Huang & Lev Ratnovski, 2009. "Why Are Canadian Banks More Resilient?," IMF Working Papers 09/152, International Monetary Fund.
    2. Alan Walks, 2014. "Canada's Housing Bubble Story: Mortgage Securitization, the State, and the Global Financial Crisis," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 38(1), pages 256-284, January.
    3. James A. Brox, 2010. "Canadian Banks and the North American Housing Crisis," Chapters,in: The Financial and Economic Crises, chapter 3 Edward Elgar Publishing.
    4. Kronick, Jeremy, 2015. "Do Loan-to-Value Ratio Regulation Changes Affect Canadian Mortgage Credit?," MPRA Paper 73671, University Library of Munich, Germany.
    5. Evridiki Tsounta, 2009. "Is the Canadian Housing Market Overvalued? A Post-crisis Assessment," IMF Working Papers 09/235, International Monetary Fund.
    6. Mario Fortin, 2015. "Why has the mortgage debt increased by so much in Canada?," Cahiers de recherche 15-03, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    7. Poitras, Geoffrey & Zanotti, Giovanna, 2016. "Mortgage contract design and systemic risk immunization," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 320-331.
    8. Chan, Sewin & Haughwout, Andrew & Tracy, Joseph, 2015. "How Mortgage Finance Affects the Urban Landscape," Handbook of Regional and Urban Economics, Elsevier.
    9. Ivo Krznar & James Morsink, 2014. "With Great Power Comes Great Responsibility; Macroprudential Tools at Work in Canada," IMF Working Papers 14/83, International Monetary Fund.
    10. Ehsan U. Choudhri & Lawrence L. Schembri, 2013. "A Tale of Two Countries and Two Booms, Canada and the United States in the 1920s and the 2000s: The Roles of Monetary and Financial Stability Policies," Working Paper series 44_13, Rimini Centre for Economic Analysis.
    11. John Muellbauer & Pierre St-Amant & David Williams, 2015. "Credit Conditions and Consumption, House Prices and Debt: What Makes Canada Different?," Staff Working Papers 15-40, Bank of Canada.
    12. International Monetary Fund, 2011. "Germany; Technical Note on the Future of German Mortgage-Backed Covered Bond (PF and Brief) and Securitization Markets," IMF Staff Country Reports 11/369, International Monetary Fund.
    13. Evridiki Tsounta, 2011. "Home Sweet Home; Government's Role in Reaching the American Dream," IMF Working Papers 11/191, International Monetary Fund.

    More about this item


    Cross country analysis; Banking sector; Borrowing; Canada; Bank regulations; Financial systems; Housing; Loans; Interest rates; United States; mortgage; regulations; mortgages; bonds; residential mortgage; mortgage loans;

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