Zero-Down Mortgages Point to U.S. Subprime-Like Mania in Canada

They’re the kind of exotic mortgages that one typically associates with the reckless, go-go housing market that gripped the U.S., circa 2005: Put down 5% cash and get 3% back; or, wilder yet, put down nothing at all. So when these products -- and others like them -- started popping up in the normally cautious Canadian financial industry, it raised alarm among policy makers in Ottawa.

This is year twenty-five of the great Canadian housing bull market, a nearly uninterrupted straight line up that has few parallels in the world. At a time of soaring real-estate prices all over the ...