September 5, 2017

Some of the advertising we have been seeing lately seems to be quite at odds with the usual conservative image that is associated with various lenders.

Expert Mortgage broker is advertising “The concept is simple – as long as you have a pulse, Expert Mortgage will provide you with a home equity loan, up to 85 per cent of the value of your property. No job required. Bad credit, OK!”

Scotia Bank is advertising on Facebook their “Start Right Program” their website indicates the target market by stating:  “We know how you feel when you arrive in a new country. The Scotiabank StartRight¨ Program for Newcomers is created to offer you all the help you need to make settling in Canada easier.”

The Facebook advertisement suggests that newcomers will have access to a$5,000.00 unsecured credit card.  That should get them started, getting into debt.  It seems that the immigrant market presents a great, albeit perhaps a little vulnerable, target for lenders – according to Statistics Canada we get approximately 80,000 newcomers each year.

If we make the assumption that the average unsecured credit limit for each of these newcomers is $5,000.00 that represents $400,000,000.00 in potential new credit card business alone, add to that the mortgage and loan business and the numbers are huge.

The indicators seem to be suggesting that after five years of austerity lenders are loosening up their purses.  Caveat emptor nonetheless – low interest rates may last for a few more years but at some point the are more likely, than not, to return to historic norms.