Minister is to announce new rules for mortgages at 8:00 am Tuesday
Lots of leaks on the internet.
One leak indicates limiting amortizations to 35 years a CMHC and the other insurers to a maximum of 95%. Was I asleep at the switch … I thought we adopted these changes in 2008.
Another leak is that amortization terms will be dropped to a 30 year maximum. That leaks did not suggest a reduction in CMHC coverage.
Of course we have been hearing for a while to expect a 4 to 5 % increase in rates before summer.
I suppose all this is intended to place a slow down on first timer buyers entering the market.
This is all bit tricky. Requiring a larger down payment may not have a great effect in a hot spot like Vancouver and its surrounding municipalities. However in areas where the housing market is still tenuous such a move could have a detrimental effect on the economy.
But I’ve read that the banks have asked for these changes not the government.
Would this be because new federal legislation now requires the banks to show defaulted mortgages on their balance sheet in the same matter as other assets?
So here is a question; are these changes intended to protect the economy or the protect the balance sheets of Canadian banks?
No way Bob.
What is good for the banks is good for the people. Eh!
I'll be up in the morning to see how the leaks compare to the announcement.