Posts Tagged ‘Finance minister’
Big Banks Behind Recent Canadian Mortgage Regulation Changes
As a follow up to my last post I continue discussing some of the myths surrounding the new mortgage regulations in Canada recently announced by our Finance Minister Jim Flaherty. The World Monetary Fund announced last year that the biggest risk to Canada is our skyrocketing personal debt. This fact has been in the news quite a bit and is one of the reason Mr. Flaherty gave for implementing these new rules.....But let's dig a little deeper. One of the primary drivers behind the recent announcement to only allow refinances up to 85%, is the lobbying by Canada's big 5 banks. In fact they have been lobbying for years to have our mortgage regulations tightened up. Why? Logically you would think tightening mortgage regulations would have a negative impact on the lending practices of the banks. At first glance it would appear so, but in reality they most likely will not be lending any less. All of those clients who needed to refinance their mortgages up to 90% will now be getting higher interest rate unsecured debt ...
New Mortgage Regulation Myths – Pt1
I posted a couple of weeks ago talking about the recent announcement of new mortgage rates in Canada. On the surface it appears that the Finance Minister, Jim Flaherty, had the best interests of Canadians at heart when he carefully crafted these mortgage changes. I'm sure he did, but what most Canadians don't know is there were other forces at play. If you followed the news at all I am sure you heard several reasons mentioned as to why these rules were put in place and over my next few posts I am going to talk about these reasons and why they may not produce the desired results. You may or may not heard the reports that Canadians were tired of CMHC playing fast and loose with taxpayer money backstopping mortgages for the banks. In other words why is taxpayer money being used to protect for profit institutions? I can see how this could be a valid ...
New Mortgage Rules Coming For Canadians
Canadian Finance Minister Jim Flaherty announced this week that Canadians will see new mortgage rules starting in March. This tightening of mortgage rules is meant to keep Canadians from using their homes as a piggy bank, and avoiding the scenario we have recently seen in the US. Consumer debt has been rising in Canada at a rapid pace in recent years and these mortgage regulations are in part meant to curb that growth by curtailing individual's ability to access the equity in their home or purchasing a home they technically couldn't afford by stretching the amortization to 35 years. What are the new mortgage rules? Reduced Amortization to 30 years - After March 18, 2011 Canadians who put down less than 20% on a home purchase will no longer be able to obtain a mortgage with an amortization greater than 30 years. The current max is 35 years which still might be available from some lenders, but only for low ratio mortgages (80% or less loan to value) Maximum mortgage refinance to ...
