TD’s residential real estate secured lending portfolio is 80% uninsured (up from 76% a year ago), with a 47% LTV for the uninsured portion (down from 49% in Q3 2021).72% of the bank’s HELOC portfolio is amortizing. The bank’s HELOC portfolio grew to $112.2 billion in Q3, up from $99.9 billion a year ago.TD’s residential mortgage portfolio rose to $244.5 billion in Q3, up from $226.3 billion a year ago.Here’s a run-down of the mortgage portfolio performance for TD Bank and CIBC in the quarter… TD earnings highlight s Q3 net income: $3.8 billion (+5% Y/Y) Rhodes added that when the loan comes up for renewal in the coming years, “at that point, you have to look at the remaining amortization adjust the payment to reflect the remaining amortization.” If they do nothing, then at that point, their amortization will be…off the original schedule.” “And the options are increase your payment, do nothing, make a lump-sum payment, things like that. “If a customer hits the point where they’re no longer amortizing the principal, we will reach out to the customer, and we’ll give them options,” said Michael Rhodes, Group Head of Canadian Personal Banking. And that’s due to how the bank deals with variable-rate clients reaching their trigger point. Rising interest rates are leading to higher amortizations at a number of big banks, where the percentage of amortizations of 35-plus years has risen to 20% or more in some cases (22% at CIBC, for example, up from 12% last quarter).īut not at TD Bank. The bank added that “proactive outreach has already begun to help our clients through a rising rate environment.” “Renewal mortgages are reverted to the original amortization schedule, which may require additional payments.” “Almost all of our variable-rate mortgages have fixed payments during the term and are, therefore, impacted by rising rates through an extension of amortization rather than an immediate change to the monthly payment,” said Chief Risk Officer Shawn Beber. That’s when borrowers’ monthly payments are only covering the interest and are no longer paying down any principal.Īside from the impact of rising rates on variable-rate mortgage holders, the concern for mortgage lenders in the months ahead is the ability of borrowers to handle significantly higher mortgage rates at renewal time.ĬIBC said $26 billion of its mortgages will renew over the next 12 months, comprising $19 billion of fixed-rate mortgages and $7 billion of variable-rate mortgages. RBC announced on Wednesday that it expects 80,000 of its variable-rate mortgage clients to reach their “trigger point” by year end. With the Bank of Canada having hiked its benchmark rate by 225 basis points since March, variable-rate borrowers have seen their interest payments soar. TD Bank and CIBC released their third-quarter earnings results on Thursday, and both provided updates on their variable-rate mortgage balances.

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