“In many cases, you are only paying the interest on a private mortgage. In many cases, you are only paying the interest on a private mortgage. Moreover, a subset of private real estate lenders known as mortgage investment companies, or MICs, outpaced overall mortgage debt growth in Canada in the second quarter of last year. What we’re seeing drive people towards the (private lending) market is they’re just not getting getting approved in the traditional lending space,” he said. With higher interest rates and stressed borrowers, the private market segment would be expected to be among the first hit, and home prices could fall in any situation where defaults rise.

Source: National Post March 06, 2023 13:03 UTC