Article content
Canada’s bank regulator is proposing to tighten mortgage qualification rules to make it more difficult for home buyers to secure financing, a move aimed at easing financial stability risks stemming from a booming real estate market.
The Office of the Superintendent of Financial Institutions said it will set up a new benchmark interest rate used to determine whether people will qualify for an uninsured mortgage to a minimum rate of 5.25 per cent. The current threshold, based on posted rates of the country’s six largest lenders, is at 4.79 per cent.
We apologize, but this video has failed to load.
Trudeau likely just getting started in bid to ease housing fever
bnnbloomberg.ca - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bnnbloomberg.ca Daily Mail and Mail on Sunday newspapers.
To view all features and options, click here.
A monthly subscription is charged pro rata, based on the day of purchase. This is non-refundable and includes a R5 once-off sign-up fee.
A yearly subscription is refundable within 14 days of purchase and includes a 365-day membership.
âSound residential mortgage underwriting is always important for the safety and stability of financial institutions,â Jeremy Rudin, head of the Ottawa-based agency, said in a statement. âToday it is more important than ever.â
The move comes amid a surge in housing prices thatâs raising concern among policy makers and economists. Cheap mortgages and new remote-working conditions have spurred a frenzy of demand for more spacious homes, with house hunters bidding up prices across the country.
Canadian house prices to rise even with tighter mortgage rules
Share
Canada’s Office of the Superintendent of Financial Institutions is proposing, among other changes, to reset the minimum floor for a qualifying rate for uninsured mortgages effective June 1.
There has been an unexpected surge in demand for detached homes, and prices, across most of the country and concerns about affordability. Among the factors seen as contributing to the market’s strength are ultra low interest rates and lower than normal listings, both pandemic-related.
The OFSI’s proposals are expected to have a muted impact on soaring housing demand and prices, though potentially “soothe the Bank of Canada’s growing concerns about the negative consequences of low interest rates”, according to Capital Economics’ Stephen Brown.
The Globe and Mail Bookmark Please log in to listen to this story. Also available in French and Mandarin. Log In Create Free Account
Getting audio file . This translation has been automatically generated and has not been verified for accuracy. Full Disclaimer
Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Citi chief U.S. equity strategist Tobias Levkovich came right out and wrote that current market conditions resemble the last stages of the technology bubble in1999,
“There’s a 1999 perspective being noted with pressure for fund managers to participate in rising share prices even if there’s also a recognition that it could end badly. With an expected Fed tapering later this year, some slippage in forward earnings guidance and the likelihood of alarming inflation data on the come (even if transitory), the upside reward versus downside potential seems skewed toward taking cautious stances. The investment community i
vimarsana © 2020. All Rights Reserved.