September 5, 2013
Regulator Eyes Tighter Mortgage Rules
This was the heading for a recent article in the Globe & Mail. The "regulator" is OSFI (Office of the Superintendent of Financial Institutions) and they are taking a closer look and doing, yet another, review of the existing mortgage rules. This comes almost a year after they put into effect the B 20 rules and guidelines for Federally regulated banking institutions. It has also come back into the forefront due to the recent increased activity in the housing market which, again, is about 1 year after additional tightening when the Finance Minister decreased the length of a mortgage life from 30 to 25 years for people who are putting down less than 20% down payment. Some reasons for this new activity may be due to pent up demand. Especially in Vancouver where we saw 19 months of decreased activity. Also employment numbers are fairly good, interest rates are low, although they've started to go up, inflation is tame and our biggest trading partner, the U.S., is starting to come back to life. Of course there's going to be increased activity.
We already have more conservative lending put in place now since the whole credit crunch and great recession of 2008 and 2009. I'm not sure if more is needed.
Taking this into consideration it may be a good time to get your mortgage approved now and a rate hold put in place.
Here's the link to the full article: Regulator eyes tighter mortgage rules