Two of Canada’s bank CEOs say that the number of people taking on extremely-long-amortized mortgages is putting the economy at risk. Ed Clark, CEO of TD Bank says that the federal government should reduce the maximum allowable amortization on home loans from 35 years to 25 years. Bank of Montreal CEO Bill Downe told The Financial Post that he agrees that tighter mortgage rules are “consistent with maintaining healthy consumer debt levels.” Their comments came as the Bank of Canada warned in the December issue of Financial System Review that consumer debt is “a key risk” for the Canadian economy. Over the last two years, Canadians have been borrowing at rates much faster than income growth, which makes them vulnerable to a changes in the economy, says the Bank.
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