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Regulators should explore boosting minimum down payment on homes: CMHC

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Canadian Realestate Magazine | 21 Nov 2016, 08:15 AM Agree 0
The head of Canada's federal housing agency says regulators should explore the possibility of raising the minimum down payment required on a home as a way of easing affordability and reducing risk to the financial system
  • Ken McClelland | 21 Nov 2016, 12:02 PM Agree 0
    CMHC seems to only take into account market conditions, including rapidly rising prices, in Canada's two largest markets, while those of us in the ROC (Rest of Canada) bear the brunt of these new and ever tighter restrictions in markets that are nowhere near as robust. The latest round of tightening regarding qualifying at posted rather than discounted rates for e.g. a $400,000 25 year mortgage has resulted in a payment differential of over $400/mth in what your payment will be at your final negotiated rate vs. what you qualify at. If the goal of this government and by extension their wholly-owned crown corporation CMHC is to gradually take the idea of home ownership away altogether, they're doing an admirable job. If the goal is to encourage home ownership, there is certainly no more tightening required, particularly in the ROC.

    Ken McClelland
    Kamloops BC

  • James | 21 Nov 2016, 02:25 PM Agree 0
    I totally disagree with you Ken although I am not a home owner yet. The mortgage rules in Canada are very loose even after the latest changes. They have pushed the price very very high. If they had been much tighter the house price would have been way less like maybe 250 to 300 nationally instead of 500 to 600 today. So you think in the rest of Canada the prices are ok? They are also very high although less high than Vancouver and Toronto. And if the price was way less you would be able to afford it even with tighter rules and also you would have way less debts and much better life in the long term. But the problem now is that since it has been very easy and cheap but not wise to get in debt many if not most people have made irresponsible decisions and to fix it it will be a bit painful for some particularly the irresponsible borrowers
  • JSarah | 22 Nov 2016, 12:50 PM Agree 0
    The minimum down payment should not be increased. The tightening of mortgage rules by the federal government and the increase of mortgage rates by the banks has already affected the first-time home buyers. With the increase in the down payment, most of the first-time home buyers will not be able to afford a home until they save up the required money, which may take years.
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