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Mortgage lending requirements in Canadian banks about to get tougher


Canada’s Finance Minister, Jim Flaherty will announce this morning a change in lending rules that will further limit the amount of cash buyers can borrow to finance a home according to a report on Globe and Mail.


Stimulus cash, and historically low interest rates have created an enticing environment for Canadian home buyers who have flooded the market to produce near record sale numbers across much of the nation. The average selling price of a Canadian home gained nineteen percent in a year while the economy was largely stagnant, prompting talk of a housing bubbleand concern that some buyers may not be able to service their current debt levels when rates return to historical norms.


There is general consensus in the financial community that raising interest rates is not the right answer to cool what some see as an overheated housing market. Bringing this beast under control without mucking things up for the economy in general is a delicate dance. Some are speculating that the rule changes will bring tougher qualification rules, and perhaps a reduction in the maximum allowable amortization period to repay a mortgage. The Canadian government reduced the maximum allowable amortization period from 40 years to 35 years in July of 2008 following a massive run up in home prices across Canada.


Flaherty will address reporters in Ottawa this morning at 8:00 AM Eastern.


Update: New Canadian mortgage rules effective April 19 2010


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Norm Fisher
Royal LePage Vidorra

Norm Fisher, Author of the TeamFisher Saskatoon Real Estate Blog

About Norm

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.Less...

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.

Norm is known for his passion for technology and can most often be found exploring and experimenting with the next big thing in real estate marketing. He was the first Saskatoon real estate agent to promote a home online and has been an early adopter of new technologies ever since. “Everything about this business has changed over the past 20 years, and it will happen again in the next ten. An open mind and a curious attitude are all that’s needed to continue to find new ways to serve our clients by delivering a faster, smoother, worry-free transaction,” says Norm.

In his spare time, Norm enjoys Crossfit and cycling, some years accumulating over 2,000 kilometres on the road. He’s a strong supporter of the Royal LePage Shelter Foundation and enjoys raising funds by joining fun, fitness-related initiatives like the Grouse Grind for Shelter. In 2015, he trekked the Peruvian Andes to Machu Picchu. In 2017 he walked the southern highlands of Iceland across mountains, sand, snow, ice, lava fields and forest for seven days. Collectively those initiatives raised over a million dollars for Canadian women's shelters.
 

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