Mortgage risks fading thanks to higher rates, tougher rules: Bank of Canada
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OTTAWA — The Bank of Canada provided a closer look Wednesday at just how much stricter mortgage rules and higher interest rates have helped slow the entry of new households into the category of “deeply indebted borrowers.”
The lofty levels of household debt has been a key concern for the Bank of Canada as it gradually raises its trend-setting interest rate, which it has already hiked five times since the summer of 2017.
To determine the pace of future hikes, the central bank has closely watched how well households are adapting to higher borrowing costs, particularly when it comes to those that are significantly overstretched.
So far, the bank has said Canadians have been making spending adjustments in response to rate hikes and the arrival of stricter mortgage policies. At the same time, the bank has reported that credit growth has continued to moderate and household vulnerabilities, while still elevated, have edged down as a result.
