The Latest Mortgage Rules and How to Take Advantage of Them

The Canadian government has announced a series of changes to the mortgage rules, and have introduced news ones. It appears that most of the changes are targeted at taming the high demand being witnessed in the country’s fastest growing housing markets – Vancouver and Toronto. Here are some of the regulations, the impact they are having, and the anticipated winners and losers, to illustrate who will likely benefit from these changes.

  1. Insurance on mortgages to loans on owner-occupied properties will be restricted with amortization periods of less than twenty-five years, purchase prices of less than $1 million, and for borrowers with a minimum credit score of 600.
  2. The underwriting of all insured mortgages in Canada will be done using posted rates to enable borrowers to get qualified based on their incomes.
  3. For foreign buyers, it will be imperative for them to prove that a home they are selling is their primary dwelling so that they are not exposed to capital gains tax exemption abuse.
  4. Capital requirement costs will go up as a result of the OSFI, and consequently, insurance premiums will also go up.

In as much as the above rules will have significant impact across the entire industry, middle class families seem to be the greatest beneficiaries, since the prices of houses will be in control and they will not feel as if the prices are beyond their reach. Since the rules are seen to mainly target the hot markets, it will now be easier for middle class families to gain access to houses in such places.

Additionally, it can be concluded with certainty that the new regulations will be effective in cooling the hot markets where house prices were seen to be unreasonably high. Such regulations are often considered a damper for the entire housing market, despite the diversity and uniqueness of each respective market.

Recent Posts

The Opportunity Cost of Not Obtaining Financing When Needed

Mortgage brokers play a crucial role in helping individuals and families secure the financing they…

2 years ago

The Importance of Quick Financing for Mortgage Brokers

When it comes to real estate, timing is everything. By helping people connect with suitable…

2 years ago

How the right Private Mortgage Lender can help your client Overcome Financial Challenges

In Montreal, a determined woman named Jana confronted a difficult phase in her life, marked…

2 years ago

How does a private mortgage lender work?

When it comes time to take out a mortgage on a purchase project, most people…

3 years ago

What is the difference between a bank and a private lender?

Borrowing and lending: these terms refer to a financial transaction and are considered synonymous. However,…

3 years ago

What are the different types of second mortgages?

When buying a property, most people rely on a mortgage. But once a house is…

3 years ago