Mortgage Investment Corporation — 2017 and 2018 update

PDF - Report

This research updates a 2015 CMHC funded study on Mortgage Investment Corporations utilizing data collected from 88 Mortgage Investment Corporations. It provides clearer views on the activity of Mortgage Investment Corporations within the Canadian residential mortgage industry. It builds on reports that were published for previous years.

CMHC uses key findings from the study and survey of Mortgage Investment Corporation providing residential mortgage loans in Canada. The finding are used to monitor trends and better understand the role and risks of Mortgage Investment Corporation’s activity.

Key Findings

Mortgage Investment Corporations:

play a peripheral role in the mortgage market which continues to grow
increased their mortgage holding in Ontario between 2017 and 2018

Implications for the housing industry

Between 2017 and 2018, mortgage investment corporations grew by approximately 10%. During the same time period, total outstanding residential mortgage debt in Canada increased at a significantly slower pace. It rose by 1.5% and reaching $1.54 trillion.
Many MICs use different strategies to mitigate risk exposure. Practices such as lenders operating in the regulated market can limit the risks faced. How broadly these measures are followed continues to be unclear.
MIC mortgage lending does not appear to be a source of systemic risk at this time given its maintained relative small size; CMHC will continue to monitor the alternative lending market to understand its growth and links to the broader mortgage market.