MP to Canadians: government punishing people for refinances

One MP attempts to educate constituents about the impact of recent mortgage rule changes

The most recent mortgage rule changes inadvertently punished a massive chunk of would-be homebuyers, and the government has seemed tone deaf in understanding those implications.

But it seems buyers – and, indeed, the housing industry – has one government official on their team.

“As a member of the finance committee, one of the duties we perform is to hear from expert witnesses and industry stakeholders on how newly announced or changed finance regulations can impact Canadians,” Dan Albas, Conservative MP for the Central Okanagan—Similkameen—Nicola district wrote in a recent editorial for the Kelowna Daily Courier.  “We learned that for those who might re-finance an existing mortgage, there are some potentially significant changes that may result in Canadians paying much higher interest rates.”

Albas was on hand for a number of meetings earlier this month between government officials, mortgage and real estate professionals, and policymakers discussing the impact of last October’s mortgage rule changes.

Currently, homeowners can refinance their homes using CMHC insured mortgages, but the proposed changes will put an end to that.

“The lack of CMHC insurance of a re-financed mortgage does not mean one cannot still re-finance. However, without the CMHC insurance, the interest rates will be considerably higher and there will be fewer competitors — as we heard from many expert witnesses at the finance committee,” Albas said. “These changes are puzzling. CMHC is not a program subsidized by Canadians. Those who use the services of CMHC pay fees that not only fully cover the costs of CMHC, they, in fact, turn a profit with net income in excess of $2 billion annually.”

The mortgage rule changes have certainly frustrated many in the housing industry – many of whom weren’t the intended targets.

But it’s clear some politicians are willing to fight for tweaks needed to ensure homeowners and potential homebuyers aren’t punished by the collateral damage.