Canada’s mortgage market is a picture of health, in contrast to concerns in the United States generated by the weakening sub prime mortgage market, says the Canadian Association of Accredited Mortgage Professionals (CAAMP).

Although new mortgage lenders and products have been introduced in Canada over the last few years, to provide borrowers more options in a rising cost environment, the Canadian mortgage market is different from that of the U.S.

The vast majority of mortgages are amortized over 25 years or less with nearly two thirds of mortgages set at fixed rates with the five year period being the
most common.

“The Canadian mortgage market also differs from the U.S. in other ways — we have not seen the aggressive lending practices common south of the border,” says CAAMP Chairman Paul Grewal.

According to CAAMP, the subprime market makes up 5% or less of all outstanding mortgages in Canada. In the U.S. the total subprime mortgage market is
closer to 20%.

CAAMP says the overall arrears rate on mortgages in Canada remains at or near record lows of less than 0.5%/

It adds that the Canadian mortgage market has not been using Option Adjustable Rate
Mortgages for subprime borrowers popular in the U.S.

As well, Canada has not seen as rapid home price appreciation, nor speculative investing when compared to the U.S.