Flaherty warns on mortgage rules from Globe and Mail
“He says the likely measures the government will take is to increase the size of the down payment from 5 per cent “to a higher figure” and to reduce the amortization period “from a maximum of 35 years to something less.”
Those measures would increase the monthly payments, making it more difficult for some people to take on a mortgage and purchase a home, without having to increase the interest rate.
Last week, the central bank warned that when interest rates rise to normal levels, up to 10 per cent of households could face difficulties in meeting monthly payment requirements.”
Thoughts
Its hard to argue the potential reasoning for this move when the US mortgage rules or lack there of has contributed greatly to the housing bubble that just burst. That being said it will make it harder for some people to be able to afford a home. Then again if they can’t meet these new rules then they probably shouldn’t be buying a home in the first place.
It will be interesting to see what the final regulations are.
What do you think of the proposed changes? Will it affect PEI real estate?
