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chemgear · 05-08-2012, 01:55 PM

Interesting if you haven't come across this yet. This came out earlier last month but going through some numbers I had a question for the smart CP minds out there/in this field.

http://www.canadianmortgagetrends.co...-80-to-65.html

Last week, Canada’s top banking regulator Julie Dickson explained why to BNN:

"We started to see [HELOCs] being used as a substitute for a mortgage. Instead of having a mortgage on a house, you had a HELOC only, and that is not what these HELOCs were designed for originally. That's why we suggested in the guideline strongly that there be a loan-to-value ratio of a maximum of 65%."

My question comes from BMO's Q1 release:

http://www.bmo.com/ir/qtrinfo/1/2012...Transcript.pdf

In our HELOC portfolios, the average loan-to-value is 54% . . .

I think BMO is the only major Canadian bank that releases this information. Anyhow, should I be reading this as that the "average" HELOC has been tapped for 54% of the value of the respective property it is held against? Or that the remaining available credit is still 54%, or something else entirely?

The number seems rather high to me and I'm not sure if I'm missing the boat somehow. Thanks in advance.

05-08-2012, 01:55 PM	#1
chemgear Franchise Player Join Date: Feb 2010 Exp:	HELOC LTVs Could Drop From 80% to 65% Interesting if you haven't come across this yet. This came out earlier last month but going through some numbers I had a question for the smart CP minds out there/in this field. http://www.canadianmortgagetrends.co...-80-to-65.html Last week, Canada’s top banking regulator Julie Dickson explained why to BNN: "We started to see [HELOCs] being used as a substitute for a mortgage. Instead of having a mortgage on a house, you had a HELOC only, and that is not what these HELOCs were designed for originally. That's why we suggested in the guideline strongly that there be a loan-to-value ratio of a maximum of 65%." My question comes from BMO's Q1 release: http://www.bmo.com/ir/qtrinfo/1/2012...Transcript.pdf In our HELOC portfolios, the average loan-to-value is 54% . . . I think BMO is the only major Canadian bank that releases this information. Anyhow, should I be reading this as that the "average" HELOC has been tapped for 54% of the value of the respective property it is held against? Or that the remaining available credit is still 54%, or something else entirely? The number seems rather high to me and I'm not sure if I'm missing the boat somehow. Thanks in advance.