Bank of Canada’s Rogers Urges Shift by Banks on Fixed-Payment Mortgages
- Variable-rate mortgages with fixed payments need ‘close look’
- Signs of mortgage stress add to downside risk for economy
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Canadian banks and regulators should take a hard look at mortgages that have allowed some households to run up large amounts of long-term debt as interest rates rose, the Bank of Canada’s no. 2 official said.
Carolyn Rogers, the Bank of Canada’s senior deputy governor, said in an interview that the number of so-called “negative amortization” mortgages is a concern. The loans have that label because they allow some borrowers to continue with fixed payments, even as the rates goes up on their loans.