Canadian Residential Mortgage Markets: Boring But Effective?

18 Pages Posted: 30 Jun 2009

Date Written: June 2009


Klyuev (2008) concluded that the Canadian market for housing finance is highly advanced and sophisticated, but financing options were somewhat limited, particularly at terms longer than five years. This paper argues that the paucity of longer-term loans is caused by a five-year maturity cap on government-guaranteed deposit insurance, and a prepayment penalty limit on residential mortgage loans in the Interest Act. That said, the availability and cost of residential loans for prime borrowers are comparable to those in the United States.

Keywords: Bank regulations, Banking sector, Borrowing, Canada, Cross country analysis, Financial systems, Housing, Interest rates, Loans, United States

Suggested Citation

Kiff, John, Canadian Residential Mortgage Markets: Boring But Effective? (June 2009). IMF Working Paper No. 09/130, Available at SSRN:

John Kiff (Contact Author)

Kiffmeister Consulting ( email )

United States

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