Delinquency rates among the province’s mortgage holders also trended lower
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More and more Ontario mortgage holders are benefiting from rising credit scores, a trend largely propelled by a recovering labour market and tighter credit conditions, according to the latest Mortgage and Consumer Credit Trends study conducted by the Canada Mortgage and Housing Corporation.
In contrast, non-mortgage holders – who are usually earning modest incomes – were found to be more affected by the interest rates from summer 2017 until recently.
Consequently, delinquency rates among mortgage holders trended lower for most credit types, aside from lines of credit, which remained relatively stable.
“The qualification requirements for a mortgage, which became even tighter over the past year, include a strong credit score and a history of stable employment and income,” CMHC stated in its market analysis.
“Fiscal stimulus at a federal level boosted job creation particularly in the Ottawa area – pushing unemployment rates well below the Ontario average. Improving labour market conditions enabled Ottawa borrowers to make timelier payments.”
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Only 0.1% of outstanding mortgages in Toronto were found to be delinquent in Q3 2018. The ratio was also remarkably low in Hamilton, at 0.09%. Both markets were far below the provincial average, CMHC noted.
These robust numbers followed a quarter which saw a slower annual increase in the total number of mortgages, as multiple pressures including interest rate hikes and population growth dragged down the number of new mortgages issued.
