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Results of the First-Quarter Survey | Vol. 11.1 | April 9, 2018

This Senior Loan Officer Survey (SLOS) focused on changes to lending practices in the first quarter of 2018. The survey was conducted between February 5 and March 2, 2018.

Household lending conditions


In the first quarter of 2017, the Bank added questions on household lending conditions to the SLOS to complement the information currently collected for business lending. With a full year of household survey data now accumulated, we will begin reporting the combined business and household results in our regular SLOS publication. This enhanced survey provides a fuller perspective on lending conditions in the Canadian economy.

The household questionnaire mirrors that for business, with questions covering both price and non-price aspects of lending conditions, as well as demand for credit, over the previous three months. Household lending is divided into mortgage and non-mortgage lending, with questions asked for each. For the household component of the SLOS, 18 institutions are currently surveyed.1


  • Overall, household lending conditions tightened in the first quarter of 2018, driven by mortgage-related lending (Chart 1). 2
  • The tightening in mortgage lending was driven by recent changes to underwriting standards (Guideline B-20),3 which mainly affected non-price conditions4 for low-ratio mortgages5 and home equity lines of credit (HELOCs) (Chart 2).6 Price conditions for mortgages also tightened, as the spreads charged to customers increased in tandem with mortgage rates.7
  • Overall, demand for low-ratio mortgages and HELOCs increased slightly. However, some institutions reported a decrease in demand due to regulatory changes, while others reported an increase, citing some pull-forward from applications received before the implementation of the B-20 changes, as well as expectations of higher interest rates. In the next quarter, respondents expect a decrease in the demand for low-ratio mortgages and HELOCs. Demand for high-ratio mortgages has continued to decline since regulatory changes were introduced in the autumn of 2016.
  • In terms of non-mortgage lending, a slight tightening in price conditions for auto loans was offset by an easing in non-price conditions (Chart 3). Both price and non-price conditions for other types of consumer lending were basically unchanged.
  • Demand for non-mortgage credit decreased in the first quarter, driven by lower demand for auto loans.

Chart 1: Tightened household lending conditions were driven by mortgage-related lending

Chart 2: B-20 rule changes affected mainly non-price conditions for low-ratio mortgages and HELOCs

Chart 3: Price lending conditions tightened, while non-price conditions eased for auto loans

Business lending conditions

  • Survey results suggest that overall business lending conditions again eased slightly in the first quarter of 2018 (Chart 4), driven mainly by price conditions (Chart 5). Non-price conditions have remained basically unchanged since some minor easing in the fourth quarter of 2016.
  • The easing in price conditions continues to be driven by intensifying competition for corporate borrowers.
  • Lending conditions for small business and commercial borrowers have remained unchanged since the fourth quarter of 2016 and the second quarter of 2017, respectively.
  • Demand for credit increased in the first quarter of 2018. This marks the second consecutive quarterly increase.
  • Access to capital markets improved marginally for all risk grades of corporate borrowers.

Chart 4: Overall business lending conditions eased in 2018Q1

Chart 5: The easing was mainly driven by corporate price conditions

  1. 1. For the business component, 17 institutions are currently surveyed.[]
  2. 2. Note that the balance of opinion suggests only the direction of the net change in lending conditions; it does not provide information on the magnitude of the change.[]
  3. 3. More information on Guideline B-20 is available on the website of the Office of the Superintendent of Financial Institutions.[]
  4. 4. Non-price conditions for household lending include, for example, minimum payments and credit limits.[]
  5. 5. The Canadian mortgage market can be divided into high- and low-ratio segments based on the loan-to-value (LTV) ratio. An LTV ratio above 80 per cent is considered high, while one below 80 per cent is considered low. Federally regulated lenders are required to insure high-ratio mortgages.[]
  6. 6. This response is similar to the non-price tightening in the first quarter of 2017, which was driven by rule changes for high-ratio mortgages introduced in the autumn of 2016.[]
  7. 7. The pricing of credit is defined as spreads over base rates, rather than as the level of rates.[]

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