History of Mortgage in Timeline

A mortgage is a loan secured by real property, used to purchase real estate or for other purposes by leveraging existing property ownership. The lender has a lien on the property, allowing them to seize and sell it if the borrower defaults. Originating from the Law French term "death pledge," the mortgage obligation ends upon fulfillment or foreclosure. Essentially, the borrower provides collateral in the form of their property in exchange for the loan.

1946: Creation of Canada Mortgage and Housing Corporation (CMHC)

In 1946, the Canadian federal government created the Canada Mortgage and Housing Corporation (CMHC) to address the post-war housing shortage.

1977: Decline in Building Societies' Share of Mortgage Market

In 1977, building societies in the United Kingdom held 96% of the new mortgage loans market.

1987: Further Decline in Building Societies' Share of Mortgage Market

Between 1977 and 1987, the share of the new mortgage loans market held by building societies in the UK fell from 96% to 66%, while that of banks and other institutions rose from 3% to 36%.

2003: Removal of Dual Stamp Duty Application in the United Kingdom

In the United Kingdom, the dual application of stamp duty in Islamic mortgage transactions was removed in the Finance Act 2003.

2004: Comparison of German, US, and Danish Mortgage Systems

In 2004, a UN study compared mortgage systems in Germany, the US, and Denmark. German Bausparkassen reported 6% interest rates plus fees. US rates, once in the teens and twenties, also reached about 6%, but gross borrowing costs were higher. Denmark had similar rates to the US, plus risk and acquisition fees.

2007: Covered Bonds Market Volume in the European Union

At year-end 2007, the covered bonds market volume in the European Union amounted to about €2 trillion, with Germany, Denmark, Spain, and France each having outstandings above €200 billion.

2007: Popularity of Fixed-Rate Mortgages in the UK

From 2007 to the beginning of 2013 between 50% and 83% of new mortgages in the UK had initial periods fixed in this way.

2007: Subprime Mortgage Crisis

In 2007, the US mortgage sector was hit by the subprime mortgage crisis.

July 28, 2008: US Treasury Attempts to Kick Start Market for Securities

On July 28, 2008, US Treasury Secretary Henry Paulson announced that the Treasury, along with four large U.S. banks, would attempt to kick start a market for these securities in the United States.

October 10, 2008: George Soros Promotes Danish Mortgage Market Model

On October 10, 2008, George Soros promoted the Danish mortgage market model in The Wall Street Journal.

2008: Financial Crisis Highlighted Regulatory Failings

The 2008 financial crisis highlighted regulatory failings, which led to the establishment of the FCA and PRA in 2013.

2010: Foreclosure Crisis

In 2010, the foreclosure crisis hit the US mortgage sector, following the subprime mortgage crisis.

2012: Scrutiny over the CMHC

In 2012, former Finance Minister Jim Flaherty publicly mused about privatizing the Crown corporation CMHC.

2013: Popularity of Fixed-Rate Mortgages in the UK

From 2007 to the beginning of 2013 between 50% and 83% of new mortgages in the UK had initial periods fixed in this way.

2013: Establishment of FCA and PRA

In 2013, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) were established in the UK to address regulatory failings highlighted by the 2008 financial crisis.

April 2014: OSFI Releases Mortgage Insurance Guidelines

In April 2014, the Office of the Superintendent of Financial Institutions (OSFI) in Canada released guidelines for mortgage insurance providers to tighten underwriting and risk management standards.

October 2016: Introduction of Mortgage Stress Test in Canada

In October 2016, Canada introduced a mortgage stress test to cool real estate prices. Borrowers undergo an affordability test based on a rate set by the Bank of Canada, impacting the approved mortgage amount.

May 2018: Peak of Stress-Test Rate

In May 2018, the mortgage stress-test rate consistently increased until its peak of 5.34%.

July 2019: First Decrease of Stress-Test Rate in Three Years

In July 2019, the mortgage stress-test rate decreased for the first time in three years, falling to 5.19%.

December 2019: Review of Mortgage Stress Test Ordered

In December 2019, Canada's finance minister Bill Morneau ordered a review and consideration of changes to the mortgage stress test due to criticisms from the real estate industry.