Agents unfazed by mortgage rule changes

by Justin da Rosa21 Dec 2015
Real estate agents in Canada are not only confident new rules will have little impact; they are applauding CMHC’s efforts.

“Thank goodness the government took this approach rather than raising interest rates to cool the hot markets, as that would have had a wide brush-stroke negatively affecting markets that are more normal -- not only in activity but in house prices,” one commenter named Jeff wrote in REP’s forum. “Buying a home up to $1 million with 5% down and CMHC (insurance) is absolutely looney in the first place.

“CMHC has a sliding scale for insurance premiums why not apply a similar sliding scale for down payments as well”” he continued. “It can always be adjusted as values increase (or) decrease (and) cost of living (changes).”

Recently announced mortgage rules – which go into effect February 15, 2016 – will require larger down payments for pricier homes.

The minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000.

Under the new rules, a $750,000 home will now require $50,000 down -- 5% for the first $500,000 and 10% down for the remaining $250,000.

And while initial fears were that the changes would force many Canadians out of the market, Realtors seem up to the challenge of helping those who may be impacted to find a home they can afford.

“To start off, anyone afraid of hard work shouldn't be in the business in the first place; and whose best interest are we supposed to be serving?” a commenter named Matt said. “If the client is better off looking at lower priced homes, then that is what they want, and it's our responsibility to keep their best interests at heart; not how much we're going to get paid based on the dollar value of the home.”


  • by 12/21/2015 11:49:17 AM

    I really wonder who were the people who commented there would be any kind of negative impact on the buying public with this new regulation. And I also wonder who were the geniuses in the government who even bothered with this as a "cooling off tool". I would dearly like to see the numbers behind this. Please tell us the actual number of people who bought homes above $500,000 with less that 10% down in 2014 and 2015. I will stand corrected if there were enough to have any kind of impact but I have the suspicion this "smells" of a headline opportunity for the ruling party to look like they are making an effort to impact the hot market places. I would like to see a discussion and implementation of (a) a foreign ownership tax, ( Mexico has one) and (b) incentives for developers and builders to invest more in the multi family market other than high-rise condos. Semi attached and townhouse development could impact the 2 "out of sync." hot markets ( Vancouver & Toronto) more than this change to downpayment numbers, IMO

  • by 12/27/2015 11:21:39 PM

    This is not really doing much for our market,,,,,I think we need to concentrate on getting the first time buyers a non repayable down payment of some sort that will help them buy up to the $500000 range( since most markets are getting to the stage where this is all you can start with)
    as far as pricing,,,,
    Not many homes in many areas are under the $499900 range,,,,,,the days of a home for $300000 are leaving us,,,,,never mind the towns that are all a crazy price ( that used to be for the starter families)
    Lets get the politicians to figure something out ,,,,,,
    First time buyers Grants always made our market spur and allowed buyers to buy their first home,,,,,,
    Lets also loosen the mortgage rules instead of making everything so hard to qualify for......

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