Canada Home Equity Lending Market – Growth, Trends, COVID-19 Impact and Forecast (2022-2027)

Canada Home Equity lending Market is segmented by type (Fixed rate loan and home equity lines of credit), by Service Providers (Commercial banks, Financial Institutions, Credit Unions, and other creditors), and by Mode (Online and Offline).

Market Snapshot

Canada home equity lending market
Study Period: 2018-2027
Base Year: 2021
CAGR: >5 %

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Market Overview

Housing prices in Canada have increased in the past 4 to 6 years, after a long period of Stagnation. This rise, while moderate in comparison to those seen in other countries, has been fuelled by increased mortgage debt.

Since the pandemic, around 16% of mortgages in Canada have been deferred, and 40% could not pay due to a pandemic-related decline in household income. Arrears rates of expired deferrals are below rates that prevailed before the COVID‑19 pandemic. Of expired deferrals that are at least 30 days behind in payment, installments loans and auto loans among renters have the highest rates of arrears.

Higher real estate values and the lowering of regulatory restrictions are encouraging Canadians to use their homes as collateral for loans. In February 2022, the seasonally adjusted balance of home equity lines of credit increased 1% to USD 128 billion. Residential mortgage debt accounts for 74% of all household debt in Canada, which helps to build net worth, whereas lines of credit account for 16% and credit card debt accounts for 4%.

New mortgage rules have been implemented in 2022, making it more difficult for Canadians to access their home equity via traditional methods. These requirements also came with increased interest rates, making it more difficult than ever to qualify for a home equity line of credit solutions. One of the changes is that Canadians now must be able to pay off their home equity line of credit within 25 years under the new rules.

Scope of the Report

A home equity lending is a type of loan in which the borrower uses the equity of their home as collateral. The loan amount is determined by the value of the property, and the value of the property is determined by an appraiser from the lending institution. Canadian Home Equity lending Market is segmented by type (Fixed rate loan and home equity lines of credit), by Service Providers (Commercial banks, Financial Institutions, Credit Unions, and other creditors), and by Mode (Online and Offline).

By Type
Fixed rate loan
Home equity lines of credit
By Service Provider
Commercial banks
Financial Institutions
Credit Unions
Other Creditors
By Mode
Online
Offline

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Key Market Trends

A Rise in Home Prices Boosting Home Equity Lending Market

Housing Prices in Canada will keep rising in 2022. The average price for a home in Canada increased around 17% year-over-year in the fourth quarter of 2021, reaching USD 779,000. In most housing markets, prices increased by more than 3% compared to the third quarter of 2020. The majority of the rise in house prices was seen across much of Ontario, primarily in the Greater Toronto Area and most major cities in British Columbia.

This increase is majorly driven by detached, single-family homes whose average price grew by nearly 21 % compared to the end of 2020. Meanwhile, condominiums rose by 15.8% in 2021. Due to the rise in real estate, Canadian home equity line of credit (HELOC) payments have surged in Q3 2021, up 0.7% from the previous quarter.

Canada home equity lending market

Skyrocketing HELOC (Home Equity Lines of Credit) Borrowing Driving the Market:

HELOC products, along with combined mortgages, grew to USD 710.3 billion in 2021, accounting for 41% of total real estate secured lending. Their share rose from 37% in the first quarter of 2019. The volume of new HELOCs being created increased by nearly 57% in the second quarter of 2021 compared to the same period in 2020. Low-interest rates were fuelling a resurgence in Home Equity Lines of Credit (HELOC).

Canada home equity lending market

Competitive Landscape

The report covers major players operating in the Canada Home Equity Lending Market. In terms of market share, few of the major players currently dominate the market. However, with technological advancement and product innovation, mid-size to large-size companies are increasing their market presence by securing new contracts and tapping new markets. It has major players, including HSBC Bank, National bank of Canada, First Ontario credit union and Hello safe, etc.,

Recent Development

On March 15, 2022, First Ontario Credit Union announced its merger with Heritage savings & Credit union to offer the best in financial products and services.

On February 09, 2022, Hello safe announced a new partnership with Hard bacon, a personal finance application used by more than 35,000 Canadians, this partnership is to leverage Hard bacon’s portfolio of comparison tools.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS AND INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Insights on Various Regulatory Landscape

    5. 4.5 Insights on impact of technology and innovation in the market

    6. 4.6 Industry Attractiveness - Porters' Five Forces Analysis

      1. 4.6.1 Threat of New Entrants

      2. 4.6.2 Bargaining Power of Buyers

      3. 4.6.3 Bargaining Power of Suppliers

      4. 4.6.4 Threat of Substitutes

      5. 4.6.5 Intensity of Competitive Rivalry

    7. 4.7 Impact of COVID-19 on the Market

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 Fixed rate loan

      2. 5.1.2 Home equity lines of credit

    2. 5.2 By Service Provider

      1. 5.2.1 Commercial banks

      2. 5.2.2 Financial Institutions

      3. 5.2.3 Credit Unions

      4. 5.2.4 Other Creditors

    3. 5.3 By Mode

      1. 5.3.1 Online

      2. 5.3.2 Offline

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concetration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 HSBC Bank Canada

      2. 6.2.2 Tangerine Direct Bank

      3. 6.2.3 True North Mortgage

      4. 6.2.4 B2B Bank

      5. 6.2.5 Laurentian bank of canada

      6. 6.2.6 National bank of canada

      7. 6.2.7 Manu life

      8. 6.2.8 PenFinancial Credit Union

      9. 6.2.9 First Ontario Credit Union

      10. 6.2.10 IntelliMortage

      11. 6.2.11 Bank of Montreal

      12. 6.2.12 Canada Trust

      13. 6.2.13 Libro Credit Union

      14. 6.2.14 Hellosafe*

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNTIES AND FUTURE TRENDS

  8. 8. DISCLAIMER AND ABOUT US

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Frequently Asked Questions

The Canada Home Equity Lending Market market is studied from 2018 - 2027.

The Canada Home Equity Lending Market is growing at a CAGR of >5% over the next 5 years.

HSBC Bank Canada, Tangerine Direct Bank, National bank of canada, First Ontario Credit Union, B2B Bank are the major companies operating in Canada Home Equity Lending Market.

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