A new report, issued by the Canada Mortgage and Housing Corporation (CMHC), reveals that residential mortgage debt levels in Canada reached $2.16 trillion as of February 2024, representing an increase of 3.4% year-over-year.

CMHC forecasts an increase in home sales and prices over the coming years due to expected declines in mortgage rates, continued strong population growth, and increases in real disposable income.

In the first two months of 2024, there were increases in discounts on fixed-term mortgage loans, reflecting trends that were prevalent in the second half of 2023.

Analysts believe that lenders expect the Bank of Canada to decide to cut interest rates, which may happen sooner than previously anticipated, and are looking to secure mortgage loans at relatively high rates.

The three-to-five-year terms remain the most common choice, representing nearly 40% of total lending by federally regulated financial institutions as of February 2024.

Variable-rate mortgages represent 15% of total loans, indicating an increase after the percentage.

This type had declined to record low levels during the summer of 2023.