Finance committee  I would add that the heart of the matter here in our view is the type of supply that is being focused on. I think the density issue is clearly a good solution to that, meaning that we need more dense-type housing in urban areas, that is, more townhouses and semi-detacheds that can be built in existing areas that are closer to the major urban areas.

Finance committee  The 30-year amortization is currently available to any buyer who is not insured. Whether you're a first-time buyer or not, if you're insured, the current rules dictate that the maximum amortization is 25 years. What we're advocating for is that the insured buyer also be allowed access to the 30-year, recognizing that it is a slight stimulant on the demand side, but in our view, it is simply long overdue that this final levelling of the playing field should occur.

Finance committee  We are able to insure foreign buyers, not if they're buying as an investment. If, however, they're here and new to Canada and are buying to occupy, we are able to insure them.

Finance committee  We do provide a fair bit of data to both the Department of Finance and OSFI, including the level of what we would call ”new to Canada purchasers”. I would indicate that it's an incredibly low number of those who are coming in as buyers in the insured space, given that these are people who, generally speaking, if they're foreign buyers for investment purposes, we can't service.

Finance committee  We compete with CMHC, as we would with any other competitor. There is really no area of the country or product type that they offer that we don't as the private sector offer too. Our view is that the nature of the industry is such that we think that probably around a third of the market would be an appropriate level for them.

Finance committee  I would agree, and I would add the 30-year amortization as perhaps the one other measure I would consider appropriate, but nothing beyond that.

Finance committee  Yes, let me address that. Rising rates have never traditionally been very highly correlated with defaults or delinquencies, simply because generally in a rising rate environment the economy is doing quite well. Second, there are a lot of options that borrowers have when they renew.

Finance committee  I would add just one point. In our portfolio we've done some analysis showing that about 95% of the borrowers who are coming up to renewing their mortgage over the next three years are actually going to be renewing at rates equal to or lower than their current rate, and that's because so many have taken these five-year fixed term mortgages.

Finance committee  Yes, certainly. I would add that what we witnessed over the last few years, and I'm sure it's the same for our competitors, is that the footprint where you see insured mortgages is moving further and further out of the major urban centres. While that's obviously where first-time homebuyers are going to buy, it's a negative for our industry and I think overall because you are seeing a move out of the more economically diverse centres where you want to be as mortgage insurers, because you need economic diversity, you need that strength for periods of downturns in the economy.

Finance committee  Thank you. The basic principle here is that the first-time buyer currently competes in the housing market against seasoned buyers, move-up buyers, and investors who often have more down payment availability because they are selling a home themselves that has a lot of equity built up in it.

Finance committee  Certainly. I'll continue. We have seen an uptick overall in the financialization aspect really represented through investors. This is data that we see externally, given that we are not able to insure investor property purchases. So we rely on external data. However, it is evident that speculation has increased, as it always does during times of very strong housing markets.

Finance committee  I think another mindset of consumers, particularly first-time homebuyers, is that they are aware there's a penalty if they break their mortgage term. Most first-time buyers view their first home as a starter home with the intention of probably moving up at some point as they expand their families, etc.

Finance committee  Is there any preference in who starts?

Finance committee  I think the issue with that seven-year term and the residential mortgage-backed security market is just the predominance today of the five-year funding structure for lenders and the issuance of five-year commercial bond paper. I do think that if they were to see merit and acceptance of a longer-term securitization vehicle, it would promote higher usage or higher offering of that term and perhaps at more appealing rates.

Finance committee  Thank you very much. Good morning to you all. You will necessarily hear some repetition here, as our businesses are, of course, very similar. Let me begin with a bit of background on us and the subject of mortgage insurance. Sagen is the country's largest private mortgage insurer.