Alternative Lenders Series

Examining the growth of alternative lenders in Canada, their potential risks and the impact of the COVID-19 pandemic.

From 2015 to 2020, alternative lenders were the fastest-growing segment in the Canadian mortgage industry. The alternative lender portfolio increased from an estimated $9 billion in 2015 to $15 billion in 2020. Factors that led to this growth include:

greater demand
rising housing prices
a low-interest-rate environment

Growth, however, slowed significantly during COVID-19.

We are exploring an alternative lender segment in a series of pieces. This will help us to better understand the potential for unconventional underwriting practices to introduce new vulnerabilities into the housing finance system. The impact of alternative lending on long-term housing affordability will also be examined.

The first piece in this series focuses on exit strategies.