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The Loonie Hour

Canadian Banks Brace for Mortgage Renewal Wall

Feb 28, 2025
Canadian banks are grappling with rising loan loss provisions amid a wave of mortgage renewals. Overconfidence among bankers clashes with an uncertain market, reflecting unrealistic expectations on housing recovery. The bond market is showing signs of concern about weaker growth, while U.S. policy changes could impact Canada significantly. A major lawsuit against BlackRock raises questions about ESG investing and shareholder priorities, amid discussions about global trade dynamics and increasing volatility in the economic landscape.
01:12:44

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Quick takeaways

  • Canadian banks are increasing loan loss provisions amid a cooling real estate market and upcoming mortgage renewals, revealing potential portfolio weaknesses.
  • Neighborhood Holdings offers conservative mortgage financing options to average borrowers, focusing on low loan-to-value ratios to minimize investment risk.

Deep dives

Attractive Investment Opportunities

Neighborhood Holdings presents a compelling investment opportunity for individuals seeking regular income solutions. With nearly a decade of consistent performance, the firm aims to provide a target net yield of 8-10%, which is appealing compared to the volatility of public markets. The strategy includes partnering with banks and brokers to lend to quality borrowers, particularly focusing on residential mortgages with lower loan-to-value ratios. This approach minimizes risk while offering monthly income to investors, making it an attractive diversification option.

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