Categories for Rate Regulation

Government is Still Roadblocking First-time Home Buyers: Viewpoint

The Feds would like you to think they want to help first-time buyers. The Liberals’ over-hyped and costly First-time Home Buyer Incentive is a case in point. “The First-time Home Buyer Incentive makes it easier for you to buy a home,” they say. What the government omits to mention is that it’s stood by and allowed the mortgage qualifying rate...

New Year, New Optimism, New Rate Risk

The Mortgage Report: Jan. 4, 2021 2020 was a year that took pleasure in humiliating forecasters. From the remarkable bounce in housing, to the resilience of mortgage volumes, to the devastation in big-city rental markets, to the homeowner exodus from urban cores to the lows of contract mortgage rates, to the persistence of high qualifying rates — 2020 made the...

First-Time Home Buyer Incentive Revamped

The Liberal government wants to give its much-criticized First-Time Home Buyer Incentive (FTHBI) a redo. In its Fall Economic Statement this week, the government said it’s going to make it easier for borrowers to qualify. Effective “spring 2021,” first-timers who use the program will be able to purchase a home up to 4.5 times their household income (currently four times)...

OSFI on Reviewing the Stress Test Rate

If you’re hoping the mortgage stress test gets easier—so you can qualify for bank financing—you’ve got more waiting to do. Canada’s banking regulator, OSFI, says it’s not ready to adjust the stress test just yet, despite proposing last February to ease it. OSFI spokesperson Michael Toope tells us: “On March 13, 2020, OSFI suspended all of its consultations and policy...

OSFI on When It Will Reassess the New Stress Test

On March 13, 2020, our banking regulator suspended its work on improving Canada’s uninsured mortgage stress test. Its decision was made in response to challenges posed by COVID-19. Prior to that, OSFI had indicated that a new and improved stress test would start as soon as April 6, 2020, pending public consultation and review. At the time, the regulator acknowledged...

7 Reasons CMHC’s Letter Was a Bad Idea: Viewpoint

Well, you don’t see this every day: The head of Canada’s housing agency seemingly guilting lenders into sending him business and tightening mortgage lending. In a letter to the industry originally leaked to Bloomberg (see below), CMHC CEO Evan Siddall chided and accused mortgage lenders of: short-sightedly sending too much business to CMHC’s competitors creating a “very significant drag” on...

Will Mortgage Deferrals be Extended?

—The Mortgage Report: July 8— Avoiding the Cliff: If six-month payment deferrals end as planned in September, tens of thousands of homeowners will default on their mortgages—no question about it. CMHC calls this the looming “deferral cliff,” and analysts want to know what the government will do about it. If Australia is any guide, deferrals could very well be extended....

Industry Leader Calls for Stress Test Fixes Now

—The Mortgage Report: June 29— Stress Test Fix Overdue: Ottawa was sensible to pause the mortgage stress test changes “given the marketplace uncertainty in March,” says Paul Taylor, President and CEO, Mortgage Professionals Canada (MPC). “However, as we begin to open businesses again, and as economists are generally expecting a housing price downturn, now is the time for OSFI and...

Internal Emails From OSFI Document its Stress Test Tweaks

—The Mortgage Report: June 25— OSFI Unplugged: Alberta MP Tom Kmiec has obtained internal emails from OSFI that chronicle the regulator’s efforts to improve the mortgage stress test—in particular its efforts to “fix” the minimum qualifying rate (a.k.a., “MQR” or benchmark rate). The emails show that OSFI’s PR staff wanted the public to know it was making “efforts to get...

The Mortgage Report – June 8

A Recovery for the Ages: Against all odds, and despite the biggest unemployment surge in a 3-month span ever, stocks have erased 2020 losses. ICYMI: Private default insurer Genworth Canada saw no need to follow CMHC and tighten its mortgage rules. Canada Guaranty, which has the lowest loss ratio in the mortgage insurance industry, made the same determination, saying, “Given...