Banks Are Getting Ready for Canadians to Start Defaulting on Their Mortgages 🚨🚨🚨
by u/BoatSurfer600 in Wallstreetsilver
Everything in Canada is effectively adjustable rate – I think 5 year terms are about the max you can get on a mortgage, then you have to refinance… This weird 30 year mortgage business in the states where you lock in and never look back – that’s totally foreign to me in Canada…
Canada’s major banks report earnings dips, putting more money aside for potential credit losses ahead of a projected economic downturn. Experts believe the worst debt pain is likely a year away.
Canada’s banks brace for possible wave of loan defaults. Why that matters
Earnings week for Canada’s biggest banks saw the country’s major lenders move in lockstep ahead of a projected economic downturn, with each putting more money away for a possible rise in credit losses.
Experts say the more expensive cost of borrowing in Canada and the possibility of job losses could catch up to households and push a growing number into default, though some believe the worst of the debt pain is likely at least a year away.
Canada’s big six banks — TD Bank, RBC, BMO, Scotiabank, CIBC and National Bank — all reported earnings for their first fiscal quarters this week, with similar-sounding results. All reported a dip in profits as they put more money aside to handle credit losses.
Digging into the banks’ financial filings finds a worrying economic picture at the heart of these moves.
BMO’s filings show that the jump in credit loss provisions for last quarter “reflected a deteriorating economic outlook,” though it noted continuing improvements in the business environment after the peak of the pandemic offset some of these concerns.