MNI BRIEF: Canadians Take More Mortgages Beyond 25 Year Term

Canadians are taking out more new mortgages with terms beyond 25 years as borrowers face risk of unemployment from a volatile global economy, using the longer amortization to cut monthly payments, the federal housing agency said Thursday. 

"Mortgage lenders entered 2025 in a healthy position, but economic uncertainty is increasing risk," Canada Mortgage and Housing Corp. said in a quarterly industry report. "High household debt and mortgage renewals at higher interest rates remain vulnerabilities."

Borrowers also switched into variable-rate mortgages as the BOC cut its benchmark seven times. Bank officials have recently put less focus on risk from refinancing at rates reflecting the earlier cycle lifting borrowing costs from near zero to 5%. (See: MNI INTERVIEW: BOC To Drop Rates In Trade War: Homebuilders)

Canadian household debt is highest in the G7 measured against disposable income at 170%, the report said, and so is household debt at 100% of the country's GDP. The average home in Toronto and Vancouver has moved above a million dollars in a nation where incomes are often one-tenth of that price, leading many buyers to more strenuous debt.