The Latest in Mortgage News: CMHC sees chance of a recession if BoC policy rate hits 3.5%

The Canada Mortgage and Housing Corporation (CMHC) has warned that if the Bank of Canada raises its policy rate to 3.5%, there is a chance of a two-quarter recession. In the high-interest rate scenario, GDP would grow by 3.4% in 2022 and 0.7% in 2023, with economic growth hitting a bottom in Q4 2022 and Q1 2023. Mortgage rates would increase, with conventional 5-year fixed mortgage rates reaching 5.7% by the end of 2022. CMHC also sees higher borrowing costs contributing to a further slowdown of the housing market in 2022 and 2023. In other news, DBRS estimates that Canada’s reverse mortgage market is currently worth just under $6bn and has strong growth potential. HomeEquity Bank currently holds more than 90% of reverse mortgage debt in Canada. Finally, Filogix's long-term agreement with Newton Velocity has come to an end.