
Mortgages aren’t generally seen as a “market,” in and of themselves, but they are. A mortgage isn’t just a way of allowing people to buy a house, or even a commercial property. Mortgages serve as an investment sector in the economy; one that attracts the attention of not only sophisticated investors, but expert analysts, and even the Canadian government.
Money to be made
The fact is that there is a lot of money to be made from lending out money to property owners at relatively higher interest rates, which is all that a mortgage really is. That’s why the Canadian government, including the Bank of Canada, as well as Canada’s finance ministry, have gone to such great lengths to ensure the financial health and stability of the mortgages market.
For example, despite the global financial meltdown that started in 2008, which was precipitated by the collapse of shady financial practices in the U.S. housing sector, Canada’s economy, including construction, real estate, and mortgage financing, remained largely intact, and has bounced back very strongly ever since.
A good Canadian balance
The key to Canada’s financial stability, including the health of the mortgages market, has been a balance between careful regulation versus entrepreneurial innovation. In fact, the private mortgages market was once considered so inaccessible to the average investor that the Canadian government itself intervened and created regulations allowing for the creation of such entities as the mortgage investment corporation (MIC).
It’s not very often that regulation can lead to more innovation within financial services, but it has been a part of Canada’s financial history, and everything suggests this stability and growth will continue for the foreseeable future.
Both the Bank of Canada and the federal ministry of finance have intervened in recent years to prevent a so-called housing bubble to burst, and to help avoid irresponsible lending practices to creep into the mortgages market itself — as it did in the U.S and elsewhere.
These recent events, as well as Canada’s broader financial track-record, serve as a source of stability and confidence in the mortgages market moving forward.
ASCEND MIC is a mortgage investment corporation that specializes in offering investors high returns at low risk in Canada’s mortgages market. Please contact us to learn more.