Advice for clients: Prepare for deal delays

by Justin da Rosa31 Oct 2016
Lenders were caught off guard by recent mortgage rules changes, according to one professional who claims deals are being delayed.

“Every single lender is behind dealing with the changes and most of them got caught by surprise because there was no consultation,” mortgage broker John Panagakos said. “Big lag getting information, getting updates, and getting approvals. Lenders I deal with are dealing with it well.

“Right away I had clients that were trying to buy a house in the $650,000 range and today they put in an offer on a condo for half the price. It was because of the stress test. The only workaround is someone getting a co-signer.”

The industry was surprised by a number of mortgage rule changes that were announced in early October.

One of the changes was a tweak to qualifying rules for insured mortgages.

Effective October 17, all homeowners taking out a high-ratio insured mortgage are now required to qualify at the Bank of Canada posted rate. That requirement will be extended to low-ratio insured mortgages on November 30 – meaning an even larger pool of clients will be impact and, perhaps, qualify for less house than they originally planned for.

However, with that effective date for that change a month away, lenders will have enough time to prepare – which means delays won’t be as pronounced.


  • by Jerry Rush 10/31/2016 1:04:16 PM

    Regulators need to question why the posted rates are so much higher then what 85% of borrowers actually pay. Is it just to maximize the unfair Pay Out penalty calculations?

  • by Rob Burns 10/31/2016 1:16:12 PM

    That is it exactly Jerry, why, you have to ask yourself, is this "Real Change" federal government not addressing this obvious unfair money grab?

  • by Rick 10/31/2016 4:47:29 PM

    This change should have been done years ago. If people can't qualify for a mortgage at the BoC. rate ( around 4,5%) then they should either wait or buy a less expensive home. Canadians are maxed out on their debt to income ratio and when ( not if ) rates start to climb we are going to have a large number of people who will start to default. These low interest rates have given everyone a false sense of security and they are over extended. I sold house when rates jumped to 18% and advised clients not to go with long term mortgages because they would see 10% or less again and they were astounded that I felt that way ( had no idea that we would see 2%). The day will come when rates are going to rise and we will be in for a surprise with the number of defaults that will start again. Back in the early 80's people were dropping off their keys of their homes to the bank because of lack of equity and not worth making payments and I fear that may once again be around the corner.

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