There was a lot of talk this past week about the potential for legislated mortgage changes this year. The government has publicly shared their concern over a heated real estate market and record debt-to-income levels. Changing interest rates effects the whole economy so the only other alternative is to change policy to affect homeowners.
This kind of interference is exactly what industry insiders would like to avoid as they feel the markets are fine as they are and there are no signs of a housing bubble. Further intervention would mark the fourth time since 2008 that the government has stepped in to affect the housing market without changing rates.
Most experts are predicting the following as possible options to help slowdown our “hot” housing market:
1. Increase the minimum down payment from 5% to 10%
2. Reducing the maximum amortization for CMHC insured mortgage to 25 years
3. Increasing CMHC premiums
Most experts expect some combination of these changes to happen before the spring market goes into high gear, and before the next federal budget, which is expected at the end of March.
With this news capturing most of the lending headlines this past week, there was little else that has affected rates. They have stayed the course while pundits watch for next week’s Bank of Canada interest rate announcement and employment numbers as a gauge for future rate direction.
Lee Welbanks is a Mortgage Broker with The Mortgage Centre and trusted Spring Realty mortgage expert. To learn more about your funding options please Contact Lee today. Lee will be posting these informative “Market Minutes” each Wednesday for you to enjoy. Please remember to subscribe to the Spring Realty Insider list to receive new blog post notifications, featured properties and insider access to Toronto’s hottest new developments.