Agents can glean some insight into just how much the new mortgage rules will impact buyers, based on a recent lender’s commentary on how it will affect their own bottom line.
According to First National, the new rules will result in decreased single-family market activity, but most of the impact will be mitigated.
The lender, which typically originates $22 million in mortgages each year, with $13 billion of that coming from new single-family residential lending.
It anticipates a drop of about 8-10% in that lending category and approximately -2-3% of its overall originations.
“First National’s business model and diversified mortgage lending activities and sources of funding provide all the strength and flexibility we need to respond effectively in the coming months to the Federal Government’s new policy directions,” Stephen Smith, chairman and CEO at First National said. “First National will assimilate these changes and continue to provide the same highly competitive, service-first value proposition that has made us Canada’s largest non-bank mortgage lender.
Our very clear message to our partners in the mortgage broker channel is that we are open for business and are looking forward to another year of good performance.”
The lender also said it will review its product offering in light of the new rule changes, which include changes to low ratio mortgages.
First National has already suspended its rental program as well as its alternative-A business-for-self program.
A recent lender commentary hints at what sort of impact new mortgage rules will have on home buyers.