The mortgage stress test is pushing Canadians into unregulated lending, CIBC says
He argues it does not take into account rising interest rates and said that since the test's introduction, the Bank of Canada raised its benchmark rate by 75 basis points .The test doesn't consider where we are in the cycle, he said, and what the likelihood is of rates rising 200 basis points — the amount plus the qualifying mortgage rate that uninsured borrowers must prove they could service their mortgage at.
Alternative lenders accounted for nearly 12 per cent of the total number of transactions in Ontario in 2018, according to the report. That's up from close to 10 per cent in 2017 or a roughly two per cent rise since B-20 came into effect. "Alternative lending, even individual lending, is part of any normally functioning mortgage market," Tal said."But a fast-growing alternative lending segment of the market is not part of a normally functioning market."CIBC deputy chief economist Benjamin Tal
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