The Globe and Mail reports in its Tuesday, March 5, edition that Canada's biggest banks lost market share in mortgage lending in Ontario last year after the federal government introduced its tougher new mortgage qualification rule.
The Globe's Janet McFarland writes that Teranet issued a report Monday saying the Big Five banks had 72.6 per cent of the Ontario market share by dollar value for new mortgages in 2018, a decline from 75.3 per cent in 2017. The rule took effect Jan. 1, 2018, and requires federally regulated lenders to ensure borrowers could still afford their mortgages even if interest rates were two percentage points higher than the rate they negotiated.
The Big Banks' declining market share in 2018 unwound some of the gains they made in Ontario in 2017, when their market share was particularly high compared with other recent years. Over seven years between 2012 and 2018, Canada's five largest banks have seen their market share in Ontario remain almost flat, climbing by just 0.1 per cent, Teranet said.
Private lenders have not been subject to the same rule changes and have seen their share of the Ontario market climb steadily from 4.4 per cent in 2012 to 6.7 per cent in 2018.
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