October 4, 2016
On October 3, Department of Finance Minister, Bill Morneau, announced changes coming to the housing/mortgage market in an attempt to cool the red hot markets of Toronto & Vancouver, which will likely have an impact on the whole Canadian Market in an adverse way. The big notable changes are:
1) Effective Oct. 17, the qualification rate currently 4.64% will now apply to all insured mortgages (even high- and low-LTV -greater than 20% equity- 5-year fixed terms , which is not the case today).
2) Regulators are banning a wide array of mortgages from being insured, effective Nov. 30.
What Does this mean to Canadians?
- An income of $100,000 today, with no debt, at a rate of 2.39% qualifies for a $541,000 mortgage, but under the new rules, they will qualify for only $423,000 ($118,000 less).
- The maximum amortization for any insured mortgage will be 25 years
The other notable change is that foreign investors will pay more in tax on their investments, which could also cause a diminished demand on the housing market.
It may be a little too early still to see what the impact will be, but I think it’s fair to say that this will likely be seen as very UNFAIR to those living outside the Toronto & Vancouver markets.
For more on this, click here
Posted by dtoombs at 6:36 AM