Interest Rate and Renewal Risk for Mortgages

Olga Bilyk, Cameron MacDonald and Brian Peterson ()

No 2018-18, Staff Analytical Notes from Bank of Canada

Abstract: In this note, we explore two types of risk faced by holders of mortgages and home equity lines of credit (HELOCs) in the context of rising interest rates: interest rate risk and renewal risk. We estimate that roughly 53 per cent of outstanding mortgages and HELOCs will face interest rate risk in 2018. However, only about 26 per cent of outstanding mortgages will be renewed in 2018.

Keywords: Credit and credit aggregates; Financial Institutions; Interest rates; Recent economic and financial developments (search for similar items in EconPapers)
JEL-codes: D1 E4 E5 G21 G28 (search for similar items in EconPapers)
Pages: 5 pages
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsan:18-18

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