Scotiabank Financial Overview

Canadian Mortgage Market Less than half of households have a mortgage or a HELOC Mortgage holders 。 Less than 50% of Canadian households have exposure to a mortgage and/or a HELOC 。 Negligible number of negative equity mortgages in Canada 。 91% of all homeowners have equity ratios of 25% or higher. Significant price decreases required to reach a negative equity position High share of equity: average equity ratio is 74% (excluding HELOCs) 。 Approximately half of first-time home buyers in Canada are able to source their down payments from their personal savings • 2014-17 data show 79% of buyers from that period have 25% or more equity o Reflects speed of rising house prices, increased down payment requirements, and tightened mortgage rules 2014-17 data indicate only 42% of first-time home buyers had less than 20% down 45 40 40 More than 50% of Households Do Not Have a Mortgage or HELOC % of households, 2017 ■with HELOC 3.4 10.6 35 30 25 20 32.0 15 30.7 22.8 10 5 0 Owned dwelling w/ mortgage Owned dwelling w/o mortgage Rented Sources: Scotiabank Economics, Mortgage Professionals Canada. High Percentage of Equity (real estate equity as % of real estate assets) Efforts to cool the housing market are working, which implies moderating price appreciation 80 % Official (excludes HELOCS) 75 70 Cda estimate including HELOCS 65 60 US estimate with NFPs excluding HELOCS 55 50 45 Official FRB with NFPS 40 (includes HELOCs) 35 90 92 94 96 98 00 02 04 06 08 10 12 14 16 Sources: Scotiabank Economics, OSFI, FCAC, Statistics Canada, Federal Reserve Board. Scotiabank® 45

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