It is a long history spanning several decades - Mortgage in Canada
History of Canadian banks and mortgage -
Bank of Montreal was founded in 1817. A number of other banks later followed. British North America Act 1867 (a.k.a. Constitution Act 1867) let crown grant rights to Canadians of land use. In todays Ontario Crown owns the residual interest in land. Originally mortgage was provided mainly by insurance companies. Until recently when Bank Act in 1954 was introduced banks were not allowed in residential mortgage market, but they were allowed to charge only up-to 6% interest. In 1967 the Bank Act was amended to remove that 6% cap.
Today there are mainly three types of Banks in Canada-
Types of Banks
- Schedule I: Banks allowed to accept deposits and which are NOT subsidiaries of a foreign bank.
- Schedule II: Banks allowed to accept deposits and which are subsidiaries of a foreign bank.
- Schedule III: Foreign banks permitted to carry on business in Canada.
There are mainly five Schedule I banks in Canada. The details of them are given below in the table.
| Banks | Royal Bank of Canada (RBC) | Toronto-Dominion Bank (TD) | Bank of Nova Scotia (BNS) | Bank of Montreal (BMO) | Canadian Imperial Bank of Commerce (CIBC) |
|---|---|---|---|---|---|
| Started on | 1864 | 1955 | 1832 | 1817 | 1867 |
| Name when started | Merchants' Bank of Halifax | Bank of Toronto, Dominion Bank | Bank of Nova Scotia | Bank of Montreal | Canadian Bank of Commerce and Imperial Bank of Canada |
Table R.1 Schedule 1 Banks
Mortgage Market Share
Distribution of mortgage market within institutions.
The Chart (source BOC) gives an idea how much market share who has. The major players are sure the major banks in Canada. Later in 1946 CMHC was mandated to help Canadians to get a better rate in mortgage interests by providing Default mortgage insurance.