Prepared by Jihad Dagher.
The average Canadian home is more expensive than its U.S. counterpart and is estimated to be worth C$374,159 as of Q2 2011 (based on data from The Canadian Real Estate Association).
Kiff, John, 2009: “Canadian Mortgage Markets: Boring but Effective?,” IMF WP/09/130.
It is also argued that the popularity of five-year retail term deposits, which is due to the 5-year insurance limit by Canada Deposit Insurance Corporation, is also a factor as it gives incentives for banks to match the maturity of their assets and liabilities.
Borrowers have nevertheless the option to pay up to 10–20 percent of the outstanding mortgage balance, annually, without penalties.
According to CMHC, the average equity in their insured mortgage portfolio is 45 percent.
The CMHC’s guarantee fees are typically in the range of 2040 basis points.