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What is the current state of Canadian mortgages and what effects will tighter restrictions have?

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.”

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?

Find out more

As mortgage broker’s we are on your team. Our job is to understand your needs, plans and wants in order to understand your mortgage needs. We then look at a number of lenders to find the best products and solutions for you.

During our time in the industry we have learned a number of tips and tricks to help you save money and to pay of your mortgage faster.

If you have any questions or would like a customized mortgage plan let us know!

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