History of Mortgage in Timeline

A mortgage is a loan secured by real property, used to purchase real estate or to borrow against existing property value. The lender can seize and sell the property if the borrower defaults, through a process called mortgage origination. The term originates from the concept of a "death pledge," signifying the pledge ends when the debt is repaid or the property is foreclosed upon. In essence, it's a borrower providing collateral in exchange for a 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 and promote homeownership.

1977: Building societies dominated the UK mortgage market

In 1977, building societies dominated the UK mortgage market, holding 96% of the new mortgage loans market.

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

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

2003: Removal of Dual Stamp Duty Application in the UK

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

2004: Comparison of German, US, and Danish mortgage systems

In 2004, a UN study compared mortgage systems in Germany, the US, and Denmark. Germany's Bausparkassen reported 6% interest rates with additional fees. US rates started high in the 1980s, reaching 6% by 2004 but with higher gross borrowing costs. Denmark's rates also fell to 6%, with additional fees.

2007: Covered Bonds Market Volume in the EU

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

2007: Financial Crisis

From 2007 to 2008, the financial crisis led to the establishment of FCA and PRA.

2007: Popularity of Fixed-Rate Mortgages in the UK

From 2007, fixing the rate of mortgages for short periods became popular in the UK.

2007: Subprime Mortgage Crisis

In 2007, the subprime mortgage crisis occurred, contributing to later economic issues.

July 28, 2008: US Treasury Attempt to Kick Start Covered Securities Market

On July 28, 2008, US Treasury Secretary Henry Paulson announced an attempt to kick start a market for covered securities with large U.S. banks, to provide an alternative form of mortgage-backed securities.

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

From 2007 to 2008, the financial crisis led to the establishment of FCA and PRA.

2010: Foreclosure Crisis

In 2010, the foreclosure crisis occurred as a result of the subprime mortgage crisis.

2012: Government Scrutiny Over CMHC

In 2012, the federal government started scrutiny over the CMHC, with discussions about privatizing the Crown corporation.

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.

2013: Establishment of FCA and PRA in the UK

In 2013, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) were established in the UK to address regulatory failings highlighted by the 2007–2008 financial crisis.

April 2014: OSFI Releases Mortgage Insurance Guidelines

In April 2014, the Office of the Superintendent of Financial Institutions (OSFI) released guidelines to tighten underwriting and risk management standards for mortgage insurance providers to contribute to a stable financial system.

October 2016: Introduction of Mortgage Stress Test in Canada

In October 2016, Canada introduced a mortgage stress test. Every home buyer obtaining a mortgage from a federally regulated lender must qualify at a rate not lower than a stress rate set by the Bank of Canada, lowering the maximum mortgage approved amount.