Home Mortgage Demand in Canada Still Strong

Recent mortgage funding across Canada remains
strong, as evidenced by the growth in Manulife Financial and BMO, as well as
recent dividend hikes by the likes of Laurentian Bank.

 While some Canadian banks such as CIBC are
struggling to absorb large losses in its US investment portfolio, other
banks are well capitalized and continue to take advantage of the monetary
stimulus emanating from the Bank of Canada. Mortgage credit is projected to expand by
10 – 11% in 2008, as reported recently by CAAMP.

While the percentage of home mortgage loans
is shifting away from home purchasing and into home refinancing, mortgage
market activity overall remains robust. A reduction in the overall number of
mortgage lenders acting in the country, however, has resulted in a shift in the
overall market shares of some of the major banks. High-ratio home mortgage loans are expected
to require a minimum credit score of 620 as of October, up almost 40 points
within the past six months.