New Mortgage Rules May Push Borrowers to Alternative Banks, RBC Warns
- Canada’s alternative lenders face bigger impact from new rules
- OSFI’s stress tests will likely further slow housing, TD says
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Borrowers who don’t meet the lending criteria of Canada’s big banks for home loans may turn to credit unions and private lenders under tougher mortgage rules released by the country’s banking regulator, according to RBC Capital Markets.
While the final rules have a “very minor negative impact” to large Canadian banks, the changes are more negative for non-prime lenders such as Home Capital Group Inc. and Equitable Group Inc. due to the stress tests and ban on bundling of mortgages, RBS analysts Darko Mihelic and Geoffrey Kwan wrote in a note to clients.