Couple more thoughts1) Japan? Are we turning into Europe and Japan, with deficits as far as the eye can see and perpetually low interest rates. If so, I think those country's banking systems were already loaded up with massive amounts of loans that are "deferred", and the banks themselves are not very profitable. Could that be the future towards our banking sector is slogging its way?
2) LTVs: Another thought, of many, EQB claims they are reducing LTV on new loans by about 5%. Lets say home prices do drop 18% (worst case CMHC claimed scenario). So where does the borrower get the money to refinance his mortgage? Say his house is worth 500 pre covid, loans at 70% = 350 mortgage.
He goes to renew (if he still has a job, what if he doesn't?). Home declined in value 18% to 410. Bank will lend 65% on it (5% less than before), so he can borrow 266k.
Where's that guy going to find the 350 - 266 = 84 000 missing that he has to come up with for the shortfall?
That's if he even has a job. Is the bank going to write mortgages for people that no longer have jobs?
ETC ETC
It just doesn't end, makes my head explode.