2018 Financial Performance

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 ○ 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 More than 50% of Households Do Not Have a Mortgage or HELOC 45 40 40 % of households, 2017 10.6 with HELOC 35 30 25 45 3.4 20 32.0 15 30.7 22.8 10 5 0 Owned dwelling Owned dwelling w/ mortgage w/o mortgage Sources: Scotiabank Economics, Mortgage Professionals Canada. Rented High Percentage of Equity (real estate equity as % of real estate assets) 80 % 75 70 10 Official (excludes HELOCS) Efforts to cool the housing market are working, which implies moderating price appreciation 65 60 55 59 50 50 45 40 10 Cda estimate including HELOCS US estimate with NFPs excluding HELOCS Official FRB with NFPS (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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