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November 6, 2024

Speech: Economic Club of Canada

Canada’s mortgage market — Senior Deputy Governor Carolyn Rogers speaks before the Economic Club of Canada. (12:40 (ET) approx.).

Mortgage stress tests and household financial resilience under monetary policy tightening

Staff Analytical Note 2024-25 Jonathan Hartley, Nuno Paixão
This note analyzes mortgage stress tests, a macroprudential tool. We find that when mortgage stress tests are applied to all mortgage purchase originations, they improve credit quality and reduce credit and house price growth. They also improve the resilience of borrowers to financial shocks, such as the large increase in interest rates during 2022–23.
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