Senior Loan Officer Survey—Third Quarter of 2018

Results of the Third-Quarter Survey | Vol. 11.3 | October 15, 2018

This Senior Loan Officer Survey (SLOS) focused on changes to lending practices in the third quarter of 2018. The survey was conducted between August 6 and September 7, 2018.

Household lending conditions

  • Both mortgage and non-mortgage household lending conditions were almost unchanged overall in the third quarter of 2018. Mortgage lending conditions had eased slightly in the second quarter (Chart 1).1
  • The price2 easing observed for both high- and low-ratio mortgages in the second quarter appears to have dissipated somewhat. However, price easing was still observed for mortgage lending in the third quarter (Chart 2). Recent changes to mortgage underwriting rules resulted in tighter non-price conditions in previous quarters. To compete within the remaining pool of higher-quality borrowers, lenders responded by easing price conditions in the second quarter, in particular, by discounting variable-rate mortgages. A few lenders partially unwound these discounts in the third quarter. Non-price mortgage lending conditions were mostly unchanged.
  • Demand remained the same for high-ratio mortgages. But it increased for both low-ratio mortgages and home equity lines of credit, as a result of broadly positive economic conditions.
  • Both price and non-price conditions for non-mortgage lending were unchanged (Chart 3).
  • Demand for non-mortgage borrowing remained unchanged overall, with slightly decreased demand for auto loans offsetting slightly increased demand for all other consumer lending.

Chart 1: Household lending conditions were almost unchanged in 2018Q3

* The balance of opinion is calculated as the weighted percentage of surveyed financial institutions reporting tightened credit conditions minus the weighted percentage reporting eased credit conditions. Thus, a positive balance of opinion implies a net tightening.

Note: Each series shows the average of the balances of opinion for the price and non-price dimensions of lending conditions for each category of lending. Last observation:

Chart 2: Price conditions eased, while non-price conditions were mostly unchanged for mortgage lending

* The balance of opinion is calculated as the weighted percentage of surveyed financial institutions reporting tightened credit conditions minus the weighted percentage reporting eased credit conditions.

Note: Each series is the simple average of the balances of opinion for high-ratio mortgages, low-ratio mortgages and home equity lines of credit. Last observation:

Chart 3: Both price and non-price conditions were unchanged for non-mortgage lending

* The balance of opinion is calculated as the weighted percentage of surveyed financial institutions reporting tightened credit conditions minus the weighted percentage reporting eased credit conditions.

Note: Each series is the simple average of the balances of opinion for auto loans and other consumer lending. Last observation:

Business lending conditions

  • For the fourth consecutive quarter, overall business lending conditions eased slightly, driven by lending institutions competing for corporate borrowers3 (Chart 4).
  • Both price and non-price lending conditions eased for corporate borrowers this quarter (Chart 5). This marks the fourth (fifth) consecutive quarter in which price (non-price) conditions eased.
  • Lending conditions for small business and commercial borrowers remained unchanged.
  • Demand for credit increased from all business borrowers in the third quarter. Regionally, greater demand was reported across all regions from small business borrowers, and in British Columbia and Quebec from commercial borrowers.
  • Access to capital markets was unchanged for all risk grades of corporate borrowers.

Chart 4: Overall business lending conditions continued to ease in 2018Q3

* The balance of opinion is calculated as the weighted percentage of surveyed financial institutions reporting tightened credit conditions minus the weighted percentage reporting eased credit conditions. Thus, a positive balance of opinion implies a net tightening.

Note: The chart shows the average of the balances of opinion for the price and non-price dimensions of lending conditions. Last observation:

Chart 5: The easing was driven by price and non-price corporate lending conditions

* The balance of opinion is calculated as the weighted percentage of surveyed financial institutions reporting tightened credit conditions minus the weighted percentage reporting eased credit conditions.

Note: Each series is the simple average of the balances of opinion for the small business, commercial and corporate sectors. Last observation:


  1. 1. 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.[]
  2. 2. The pricing of credit is defined as spreads over base rates, rather than as the level of rates.[]
  3. 3. Corporate, commercial and small business borrowers are differentiated by the size of the loans authorized. See Box 2 in “The Bank of Canada’s Senior Loan Officer Survey.”[]