A lot of Canadians are going to non-bank lenders for their mortgage needs. A Statistics Canada (Stat Can) survey shows a substantial amount of new loans at non-bank lenders in Q1 2019. The high growth rate is also accompanied by a larger than typical rate of arrears for Canada. Most of the mortgage debt in arrears is uninsured.

Canadian Non-Bank Lenders Hold Over $324 Billion In Mortgage Debt

Even with a slow first half of the year, non-bank lenders still did a lot of mortgage business. They added 49,402 insured mortgages in Q1 2019, totaling $14.14 billion of mortgage credit. Non-bank lenders now hold 621,730 insured mortgages, totaling $138.55 billion in mortgage credit. That works out to 7.95% of mortgages added to the books in the quarter. Not a bad haul.

Mortgages Held By Canadian Non-Bank Lenders

The number of residential mortgages held by Canadian non-bank lenders in Q1 2019.

Source: Statistics Canada, Better Dwelling.

Uninsured mortgage credit printed even larger numbers for non-bank lenders. They added 74,769 uninsured mortgages in Q1 2019, totaling $18.63 billion in mortgage credit. This brought total uninsured mortgages to 1,099,121, adding up to $186.38 billion in mortgage credit. That means 6.80% of mortgages at the end of the quarter were from new loans.

New Mortgages At Canadian Non-Bank Lenders

The number of new residential mortgage issues at Canadian non-bank lenders in Q1 2019.

Source: Statistics Canada, Better Dwelling.

Canada’s Non-Bank Lenders Hold Over 33,000 Mortgages In Arrears

Non-bank lenders appear to have more mortgages in arrears than typical lenders. They held 13,069 insured mortgages in arrears in Q1 2019, totaling $2.48 billion in mortgage debt. Of that, 1,704 of them, represents $315 million in mortgage debt, was over 90 days in arrears. That represents an arrears rate of 2.10%, much higher than the national average.

Mortgages In Arrears At Canadian Non-Bank Lenders

Mortgages in arrears at Canadian non-bank lenders, for Q1 2019.

Source: Statistics Canada, Better Dwelling.

Uninsured mortgages are doing a little worse than insured mortgages. Non-bank lenders held 20,224 uninsured mortgages in arrears in Q1 2019, totaling $3.78 billion. Of those, 2,359 were in arrears for more than 90 days, totaling $587.77 million in mortgage debt. That represents an arrears rate of 1.84%, lower than insured – but higher than the national average.

Non-bank mortgage lenders are still doing a lot of business. They represent about a fifth of all household mortgage debt. However, it also appears they are disproportionately represented for mortgages in arrears.

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