If you thought the rules were tough now, you may not want to know that OSFI are beginning to think about changing things up again. Instead of just leaving the rules as they are, they want to cut long-term amortization rates to 25 years – instead of the current 35 years offered by some lenders. While most can’t qualify for the 35 year loan, regulators still want to close any loopholes the financial institutions may be able to abuse future. Right now, 80% of Canadian households are holding $20,000 or more and consumer household debt.
Department Of Finance Keeps Tinkering With Mortgage Rules
The Department of Finance keeps “fine tuning” the mortgage rules, hoping to close any gaps that the lenders can exploit to cause instability in the market. While this makes everyone’s job harder (especially ours as Canada mortgage brokers trying to find you the best rate), it is important that the rules keep adapting to the market. The Americans didn’t keep up with their market and look what happened to them. As much as many brokers complain about how things are and how they should be, I think we’re all happy that the market is doing so well and that we can keep helping people like you find the Canadian mortgage that they need to finance their projects.
What does OSFI do?
OSFI is a branch of the government that keeps on top of all kinds of financial stuff. They work with private mortgage lenders and conventional mortgage lenders to make sure everything’s on the up and up. Right now they’re working with lenders across the board to make sure that the new mortgage rules end up working out for all involved. It’s hard to say just who will benefit from the Canadian mortgage changes around the corner, but if it’s coming, it’s best to deal with them now.
Is the great Canadian housing downturn around the corner?
It could be, but most analysts think that the housing market will have a soft landing – meaning that most home owners won’t even notice it’s happening. Double digit home valuations going up each year will start to ease off and we’ll see a return to numbers that are more sustainable. This is good for just about anybody, and if you want to borrow against your home, you may want to do it now while the value is high. Talking with one of our Canada mortgage brokers can help you get the most out of your Canadian mortgage, regardless of how the rules change.
What do these rules mean for homebuyers?
Most homebuyers won’t feel the crunch, but some will. It’ll all come down to where you’re at with your equity situation, what kind of credit you have and what lender you work with to get your Canadian mortgage. Don’t be afraid to search for the better deal; call us today and see what one of our Toronto mortgage brokers can do for you.