June 19, 2024

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Bank of Canada urges a close look at negative-amortization mortgages

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Canadian banks and regulators should take a hard look at mortgages that have allowed some households to run up large amounts of long-term debt as interest rates went up, the Bank of Canada’s no. 2 official said.

Carolyn Rogers, the Bank of Canada’s senior deputy governor, said in an interview that the number of so-called “negative amortization” mortgages is a concern. The loans have that label because they allow the borrowers to pay fixed payments, even as interest rates rise.

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Bloomberg News

2023-11-03 17:45:41

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