MP to Canadians: government punishing people for refinances

by Justin da Rosa on 22 Feb 2017

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.

Post a Comment

Most Trending News

The advantages of investing in real estate

Even amid the pandemic, there are plenty of advantages to investing in real estate. Here's what Cliff Fraser, chief business development officer of Burlington, Ontario-based Equiton Inc., has to say on the matter.

Read More
Bank Of Canada Holds Overnight Rate Steady

"Recent jobs data show that workers in contact-sensitive sectors have once again been most affected. The employment rate remains well below its pre-pandemic level, with low-wage workers, youth and women continuing to bear the brunt of job."

Read More
In Toronto, condos are your best bet

According to Point2 Homes’ 2021 Homebuyer Survey, 51% of Canadian respondents said they have no worries buying while 44% said they're unsure when they'd buy due to low inventory and high prices.

Read More