History of Mortgage in Timeline

A mortgage is a loan secured by real property, used by buyers to finance property purchases or by existing owners to raise funds for other purposes. The property acts as collateral, granting the lender the right to seize and sell it if the borrower defaults. The term originates from the medieval Law French term "death pledge," signifying the pledge ends either upon loan fulfillment or foreclosure. Essentially, the borrower provides collateral in the form of property in exchange for receiving a loan.

1946: Creation of Canada Mortgage and Housing Corporation

In 1946, the Canada Mortgage and Housing Corporation (CMHC) was created by the federal government to address the country's post-war housing shortage and to help Canadians achieve their homeownership goals.

1977: Building societies dominate mortgage market

In 1977, building societies dominated the mortgage industry of the United Kingdom.

1987: Building societies mortgage market share declines

Between 1977 and 1987, the share of the new mortgage loans market held by building societies fell from 96% to 66%.

2003: Stamp duty application removed in the UK

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

2004: Mortgage system comparison

In 2004, a UN study compared German, US, and Danish mortgage systems. The German Bausparkassen reported interest rates of approximately 6 per cent per annum. In the United States, the average interest rates for fixed-rate mortgages in the housing market reached about 6 per cent per annum. In Denmark, similar to the United States mortgage market, interest rates have fallen to 6 per cent per annum.

2007: Covered bonds market volume

At year-end 2007, the covered bonds market volume in the European Union amounted to about €2 trillion.

2007: Fixed-rate mortgages become popular

From 2007 to the beginning of 2013, fixing the rate of the mortgage for short periods has become popular.

2007: Subprime Mortgage Crisis

In 2007, the US mortgage sector experienced the subprime mortgage crisis.

2007: Financial crisis

The FCA and PRA were established in 2013 with the aim of responding to criticism of regulatory failings highlighted by the financial crisis of 2007–2008.

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

On July 28, 2008, US Treasury Secretary Henry Paulson announced that, along with four large U.S. banks, the Treasury 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

The FCA and PRA were established in 2013 with the aim of responding to criticism of regulatory failings highlighted by the financial crisis of 2007–2008.

2010: Foreclosure Crisis

In 2010, the subprime mortgage crisis led to the foreclosure crisis.

2012: Government Scrutiny Over CMHC

In 2012, there was federal government scrutiny over the CMHC, with the Finance Minister publicly considering privatizing the Crown corporation.

2013: Fixed-rate mortgages popularity

From 2007 to the beginning of 2013, between 50% and 83% of new mortgages had initial periods fixed.

2013: Establishment of FCA and PRA

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

April 2014: OSFI Releases Mortgage Insurance Guidelines

In April 2014, the Office of the Superintendent of Financial Institutions (OSFI) released guidelines for mortgage insurance providers aimed at tightening standards around underwriting and risk management.

October 2016: Mortgage Stress Test Introduced in Canada

In October 2016, Canada introduced a mortgage stress test, requiring home buyers to undergo a test judging affordability based on a rate set by the Bank of Canada.