Newsletter June 2019

Welcome to the Guardian Financing June 2019 monthly newsletter. This month we have 2 topics, the CMHC opposition to the proposed B – 20 Amendments., and how economists differ on the effects of longer-term mortgages.

First Topic: CMHC against the B – 20 Amendments

The famous B – 20 Amendments are changes primarily targeting the rules for mortgage qualification in Canada. The amendments seek not to turn things around and take mortgage qualification back to what it used to be before the rules came into play, but to simply adjust them so that they can be in tandem with the prevailing conditions in the housing market.

However, the Canada Mortgage and Housing Corporation is against the amendments, which they see as reckless myopia that will come with devastating consequences. According to the CMHC president, the government should go ahead and implement the B – 20 in full and not listen to any proponents of the amendments which he terms as “self-interest” parties.

Experts see the changes as a necessary move because change is always constant in the mortgage industry. As it is, B – 20 has caused significant impacts that if not amended, then the consequences are likely to last for so long and may upset the mortgage industry in many negative ways. The numbers show that there are signs of damage already, and if nothing is made on the B – 20, then things may only get worse. But with the back and forth pulling between the proponents and CMHC, we can only wait and see how things turn out.

Second Topic: Economists Differ on the Effects of Longer-Term Mortgages

Canadian economists have divided views about the longer term and shared equity mortgages. A section of the experts believes that though it is a good thing for consumers to have a variety, there has to be a balance between macroprudential considerations given the high indebtedness of Canadian households. Those of the other opinion assert that the economy will always benefit from any effort geared towards improving the availability of credit. According to them, borrowers with longer-term mortgages will have more certainty which will, in turn, help them to plan and improve their household incomes.

Though the experts’ views on the Canadian mortgage landscape may be varied, they all agree on the decision taken by the Bank of Canada on the next interest rate. The majority feel that the current rate of 1.75% should stay for the time being. In the event of a change, they are for the rate to be adjusted upwards, and not to be lowered as some people have suggested. The reason for this is that recent data suggests that the growth in the economy will be stronger than what BoC had initially thought, and under such conditions, there will be no need to lower the rates.

Guardian Financing is a direct private mortgage lender. We serve the greater Montreal area providing short term residential mortgage loans, typically ranging from $50,000 to $2,000,000. Contact us today to discuss your file at 514-700-3121 or by email at