Bank of Canada’s new forecasting model zeroes in on mortgage renewals
Bank of Canada governor Tiff Macklem issued a stark warning Monday that a fresh round of US tariffs and elevated global oil prices risk undoing Canada’s hard-won economic recovery.https://t.co/k19n8NXNPd
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 22, 2026
How Prima tracks mortgage renewals
Prima replaces an approach that judged inflation largely through economy-wide supply and demand. It splits households into three groups based on how they spend and borrow.
“Roughly one-third of the households in Prima are current-income households, about half of which are homeowners,” wrote authors Don Coletti and Martin Kuncl.
Brokers work with that homeowner group every day. These borrowers have little liquid wealth and substantial mortgage debt.
“Higher interest rates gradually raise mortgage payments as loans renew or refinance, reducing cash available for other spending. Lower house prices also reduce housing equity and borrowing capacity,” the paper said.
The model also treats mortgage interest costs as their own component of the consumer price index (CPI), with “changes in market rates passing through gradually as mortgages renew or refinance.”
