The Bank of Canada released their financial system review today which shed some vital insights on household debt, mortgage originations and the housing market. It’s a 44 page report that economic geeks have been salivating over for weeks. However, i’m sure you’d rather not bore yourself to sleep, so i’ll provide some the key takeaway’s here. Low Ratio Mortgages Are Growing After Previous Stress Test When the previous mortgage stress test was introduced in November 2016 it targeted insured borrowers. Meaning, people who were borrowing with less than 20% down had to pass a stress test. Borrowers, particularly in Vancouver & Toronto who were desperate to participate in the housing market began to get creative and found various ways to come up with a 20% down payment. (18% of down payments now come from The Bank of Mom & Dad. Low ratio mortgages, meaning borrowers with 20% down or more increased from 85% of all loans in Vancouver to 90%. This is also due to increasing home prices which requires a 20% down payment on all purchases above $1M. So What Does this mean? First off, 90% of all mortgages in Vancouver are now low-ratio. This basically means most of