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Canada's banking regulator says lenders will need to hold more capital as mortgage balances grow

Reuters
·1-min read

TORONTO, Oct 20 (Reuters) - Canada's banking regulator on Friday that its revised capital guidelines that go into effect in 2024 will require lenders to hold more capital for negatively amortizing mortgages.

The spikes in interest rate have led a hike in monthly mortgage payments while in some cases where the payments are fixed, they do not cover the interest portion of the loan.

The Office of the Superintendent of Financial Institutions (OSFI) has been closely monitoring the impact of the interest rate hikes on Canadian homeowners while urging lenders to tackle risks from mortgage extensions.

For consumers who currently have a mortgage, the changes will not lead to an increase in monthly payments, OSFI said. (Reporting by Nivedita Balu in Toronto)