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Canada Mortgage-Backed Securities Market May Cool on New Rules

  • Housing measures from Morneau may curb origination of bonds
  • MBS sales have grown alongside Canada’s hot housing market
Updated on

Efforts to cool Canadian home prices could trickle down to the C$440 billion ($335 billion) market for debt backed by insured residential mortgages.

Stricter rules for banks lending to home buyers and higher requirements for mortgage insurance could reduce mortgage origination in Canada and in turn lower sales of mortgage-backed securities, according to investors and analysts.