If the Conservatives win in October’s federal election, it would have major changes to Canadian mortgage regulations. Andrew Scheer shared his vision with the Canadian Home Builders’ Association or CHBA.
Andrew Scheer said the combination of endless tax hikes and tight mortgage regulations were making the dream of owning a home harder for people to achieve. This had its greatest impact in hot markets like Toronto and Vancouver.
Scheer said that the stress test for uninsured mortgages had major unintended consequences. He stated that the Conservative party was committed to reviewing it and making changes. For example, they are discussing bringing back the 30-year mortgage for insured mortgages that was ended in 2012 by the OSFI.
One thing they have promised is scrapping the stress test Grande Prairie mortgage holders have to undergo if they want to renew their mortgage with a new lender but do not face if they stay with their current lender. The rules required an uninsured mortgage to pass a stress test at an interest rate 200 basis points higher than what their federally regulated lender had. This prevents mortgage holders from refinancing their loans on more favorable terms, while it gives their current mortgage lender quite a bit of power. Other rules choke off access to mortgages for first-time homebuyers who could afford a home. The rules cost those who did buy homes in other ways. Many had to resort to higher interest rate loans from private equity groups, paying more than they would if they had a traditional mortgage. The terrible irony is that they’re now paying much more for their mortgage than they would if they were paying the higher interest rate applied in the stress test. These rules echo those made by the President of the Real Estate Board of Greater Vancouver earlier this year.
The Conservative Party said they would also address the supply side of the housing affordability equation. One approach is reducing the bureaucratic hurdles builders face getting new homes approved and the associated costs they pay. He quoted a C. D. Howe Institute report that excessive regulation added a hundred thousand dollars or more to the cost of a single-family detached house. He is also going to work with builders to find ways to get many more homes built. This would reduce the cost of homes for everyone by increasing supply.
In summary, a Conservative win in October would make mortgages more affordable for Grande Prairie mortgage customers. In addition, it may, over the long run, make housing more affordable for everyone. Call your trusted Grande Prairie Mortgage Brokers at Grande Prairie Whalen Mortgages to discuss how this can help you purchase or renew your mortgage.