US tariffs are shaking global markets, but for private mortgage investors, they’re also creating unexpected opportunities in Canada.
In the ever-evolving world of mortgage investing in Canada, one of the more complex questions that investors and brokers face is:
How do US tariffs impact Canadian mortgage investments?
It’s not a straightforward cause-and-effect situation, but the ripple effects of American economic policy, especially tariffs, can influence our markets in surprising ways.
The Reality: It’s Not a Direct Line
While US tariffs (and even just the threat of them) certainly affect global markets, it’s a stretch to say that what Donald Trump or the US government does with international trade will directly impact mortgage investments in Ontario or across Canada.
Why? Because multiple opposing forces are at play. Some are positive, some negative, and they don’t always cancel each other out.
Let’s break it down.
Lower Interest Rates Fuel Housing and Lending
One unexpected side effect of tariff uncertainty is the lowering of interest rates.
When global markets become unstable, central banks, like the Bank of Canada, often cut rates to stimulate the economy. For the private lending and mortgage investment space, that’s generally a good thing. Lower rates are good for housing demand. They increase the spread for lenders who are offering higher-yield private mortgages.
In short, when rates drop, the mortgage investment environment becomes more profitable—especially for those holding high-yield mortgage investment products.
Economic Stress and Borrower Risk
On the flip side, tariffs can be bad for the economy, and that’s where things can get risky.
A weaker Canadian economy may result in:
- Job losses or precarious employment
- Business slowdowns
- A rise in borrower defaults- See how we protect investor capital with The Paragon Method
This naturally affects the financial health of borrowers, leading to greater risk in mortgage investments, especially if underwriting standards don’t adapt quickly enough.
A Surprising Upside: Better Borrowers Entering the Private Market
However, a downturn doesn’t always mean higher risk. In fact, it can mean higher-quality borrowers seeking private solutions for the first time.
Think about it:
- Borrowers with excellent credit histories and strong income records
- Long-time bank clients who never missed a payment
- Now facing irregular income or employment uncertainty due to broader economic shifts
These borrowers may no longer qualify at traditional banks but are still highly reliable. For private lenders, this creates an opportunity to fund better-than-average clients in a changing economy.
It’s All About Adaptability
So, will US tariffs affect your mortgage investments? Not directly, but their macro-economic effects certainly influence the environment we lend in.
At Hosper, we believe in our strong underwriting—evaluating each deal with current market realities in mind. As global and local economic factors shift, so must our lending strategies.
Tariffs are just one of many forces that remind us: mortgage investing is not static. It’s responsive, adaptive, and always evolving.
Stay Ahead of the Curve with Hosper
Understanding the bigger picture can help you make smarter decisions. Follow Hosper for more insights on private lending, market shifts, and how to build a resilient mortgage portfolio in any economic climate. Ready to take advantage of market shifts? Earn up to 13% with our Direct Mortgage Investing program.
FAQs
Why do Canadians borrow private?
As banks tighten lending criteria, more Canadians are turning to private lenders, creating strong demand and attractive returns for investors.
How is my investment protected?
All mortgage loans are secured by real property in Ontario and backed by a title insurance. Further, Hosper Mortgage has a rigorous process of mitigating risk, known as The Paragon Method
Can I invest in only part of a loan?
Yes. You can split the loan with a friend, or we can fill the remaining share of the loan with another investor in our network.
What is Loan-to-Value?
Loan-to-value is a very crucial ratio for mortgage lenders. This ratio represents the share of value of a home which is debt (i.e. loaned by banks or private lenders) against the total overall value of the home.