This week I read an article in The Financial Post stating that 60% of mortgages in Canada are held by chartered banks. My father often talks to me about the ‘good ol’days’ when chartered banks weren’t in the residential mortgage business period. He often reflects back on the time when the majority of residential mortgages were provided by small specialized Trust & Insurance companies and private lenders. It was a very different world back then and it was only in the last 20 years that chartered backs have really started to dominate the Canadian residential mortgage market. This latest article from the Financial Post highlights this shift and why today the banks hold most of the cards in the mortgage game.
For many borrowers a mortgage seems like a pretty straight forward business. “The bank approves me for a loan, I go to my lawyer’s office to sign for the mortgage and then I pay the bank my regular principal and interest payments.” This is only the surface and really the side show of the facsinating business that are mortgages in Canada.