Canada’s big banks brace for more bad loans

Globalnews just released an article about banks are embracing more "bad loans"

What it means for home owners and borrowers in Canada?

1. Banks are bracing for more defaults....

They are tightening up All three major banks reported they are continuing to set aside money in case loans default, and are actively focusing on "de-risking." Translation: banks are getting more cautious about who they lend to and how much. If you're renewing or applying, expect more scrutiny.

2. Mortgage delinquencies are rising fast

Especially in BC The number of homeowners in BC who have missed multiple mortgage payments has increased 36% year-over-year. If you're stretched on payments, you're not alone — but the window to work something out with your lender is narrowing as banks shift into risk-reduction mode. globalnews

Anecdotally, I recently reviewed a client's mortgage statement showing a 70-year amortization. This happens when variable rate borrowers hit their trigger rate and trigger point.... meaning their payments have stopped covering any principal at all. When renewal comes, their current bank will require a large lump sum balloon payment just to bring the mortgage back to a reasonable amortization. Many borrowers have no idea this is coming.

source: https://globalnews.ca/news/11870405/canadian-bank-earnings-loan-losses/