Restrictions on Canadian Mortgages
The government body that regulates the banks, The Office of the Superintendent of Financial Institutions (OSFI), is investigating creating further restrictions for borrowers in Canada.
They are considering debt to income restrictions, further debt ratio restrictions and a swath of smaller tweaks.
The take away? OSFI is not satisfied with the current restrictions even though a record number of Canadian’s are current on their mortgage.
Peter Routledge, the head of OSFI has stated “99.86% of Canadians are current on their mortgages, and that’s the best it’s been in terms of our recorded history.”
How Could Restrictions Impact Canadian Homeowners?
The result? If these changes go through it is almost inevitable that Canadian’s will qualify for less and need to jump through more hoops to buy a home. We may have a stronger housing market and owners may be protected by these changes but that protection will come at the cost of less options and choices.
There has been rule change after rule change in the name of strengthening the lending system, as a result Canadian’s qualify for significantly less than they did in the early 2000’s. The result? A record low level of mortgages in delinquency yet OSFI wants to add even more restrictions and safe guards.
Does OSFI know the sh#t is about to hit the fan? Or is a regulator jumping at shadows to justify their existence?
I for one don’t know, I can see the argument for both sides. What do you think?
