New mortgage rules April 19th
The Federal Government has just announced their anticipated changes to insured mortgage rules to prevent a Canadian housing bubble (which they see no evidence of yet).
The key changes are:
- borrowers must qualify for the 5 year rate even if they opt for a shorter term.
- on refinancing, the maximum amount of equity withdrawal is reduced from 95% to 90%.
- non owner occupied residences bought for speculation now require a 20% down payment.
More info in this Reuters article. There’s still time to buy (or sell) under the old rules, but you better hurry!
RSS 2.0 comments feed. leave a response, or trackback from your own site.
March 11th, 2010 at 11:26 am
@asp: This is not good about housing market. The reson you will see housing market is go up quite a bit right now due to peopel go crazy to buy.
However things will change when rules will apply. Because who has enough money to put towards home and stuck for long time to pay mortgage. Looking to persent market condition no one would like to take a risk. I will give 100% Guarantee that market will drop onces the rule apply.
So if you think you have good money and you will pay 10% down or 20% down as a second home buyer just wait. U will see the good price drop due to drop in number of house sell.
February 17th, 2010 at 6:31 pm
@’What are the real rules here? do they have some magic formula to decide if a given purchase is for speculation?’
Again, our gov’t can’t get their shit together.They are screwing average Canadians over ‘over-seas’ speculators.
The Chinese citizen, when he/she buys a property in china only acquires it for 99 yrs. Basically a lease.
So they come to Vancouver to secure their money by speculating.
February 17th, 2010 at 6:29 pm
@’What are the real rules here? do they have some magic formula to decide if a given purchase is for speculation?’
Again, our gov’t can’t get their shit together.They are screwing average Canadians over ‘over-seas’ speculators.
The Chinese citizen, when he/she buys a property in china only acquires it for 99 yrs. Basically a lease.
So they come to Vancouver to secure their
February 17th, 2010 at 9:15 am
Very good BNN piece this morning by Danielle Park on the situation in housing – well worth the watch:
http://watch.bnn.ca/clip267421#clip267421
February 17th, 2010 at 3:58 am
@neeo:
They paid the market price for the tickets, not “more than market”. You are confusing market price with face value.
Same goes for investments. Most bonds these days have a market price over face value because interest rates have gone down since they were issued.
But the face value is what the bondholder gets back, and IMHO face value is what those ticket buyers should get back. They knew what it was when they bought the tickets.
February 17th, 2010 at 2:36 am
I just have one qyuestion regarding all these things.Will the people who paid more than market for scalped tickets on Vanocs scalper site get the full refund or only the face value. What about all those poor suckers who got ripped off by Vanocs santioned brokers in the US?
………….
neeo
uk mortgage
February 17th, 2010 at 2:17 am
Anybody who has followed this blog for any length of time knows that I almost never agree with Dave, but Ulsterman (and Davie) is correct–the Guardian is left-of-centre. By the way, ulsterman, the Guardian article describing pre-Olympics Vancouver as a war zone was contributed to the paper by a Vancouverite freelancer.
February 17th, 2010 at 1:34 am
Got to agree with Dave here. Anyone who has lived in the UK knows that the Daily Telegraph is right of centre and the Guardian is left of centre. This is just a fact of British life.
I usually like the Guardian’s reporting but i became skeptical after reading a report of the Olympics and the reporter described Van as a war zone/police state, with helicopters skimming the roof tops of False Creek. I’d just finished walking False Creek North that day and realised that this was very biased reporting.
I’m an Olympic skeptic and generally can’t abide the mindless ra-ra of people with regard to “our team”. I’m also a housing bear. However, the vitriol aimed at Dave appears utterly mindless and unnecessary.
February 17th, 2010 at 12:47 am
#102 @Vanguy: I’ve noticed that the first 60 comments usually contain everything worthwhile, 60-90 is where it devolves into a personality driven freakshow, and anything with triple digits is essentially random. I’m surprised Godwin’s law is not invoked more often.
February 17th, 2010 at 12:21 am
DoDo1975:
I think this norm is vague on purpose…it can be bent! The government does not want to take away the punch bowl. The party has to go on. A vague norm is hard to enforce. This is the whole point here.
Example: if I apply for a mortgage I can ‘add’ expected consulting fees to my income. The number is up to me to make up. Or I could use my partner’s income. Or I could pick a favorable interest rate (even if i could never get it).
All the restrictions based on the income of the borrower are virtually unenforceable. The only restrictions which are hard to elude are the ones pertaining to the actual cost of the estate: if someone tell you that you must have a 10% downpayment, there is no getting around that.
Any doubts why the government is choosing to restrict reported Income?
These are the same guys who allow the CMHC to bankroll speculators and investors by carrying their risk. Can you trust them to do the right thing?
Write to your MPs and make yourself heard (Drachen posted email contacts for your area’s MPs in the previous post). Tell them that, if they really want to have free market, they should start by removing the CMHC, which distorts the pricing of risk and encourages reckless behavior by speculators and RE investors, while at the same time pushing up valuations for people on the market for their main residences.
The thing I find most unsufferable in this situation is the smug face of Flaherty, who goes on TV and claims to be doing the ‘prudent’ thing. This is wrong and the taxpayers will be left with the huge CMHC bill to settle.
February 16th, 2010 at 11:54 pm
Still would be interesting to find out exactly what qualifying for a fixed 5 year rate means. Does this mean their posted 5 year term? Someone elses posted 5 year? Their own 5 year discount term? Someone elses 5 year discount term?
February 16th, 2010 at 11:12 pm
@Drachen:
I’m not the one to bring IQ into discussions. Project much?
February 16th, 2010 at 11:10 pm
@Vanguy:
yes, the norm is vague and essentially unenforcable. It is just a way to deflect responsibility if anything were to go wrong.
Abolish the CMHC!
February 16th, 2010 at 10:50 pm
@scullboy:
Dave’s obsessed with intelligence based insults (inferiority complex I suppose) and realpaul is a fecopheliac what else is new?
Neither really brings anything useful to the table although Dave is pretty fun sometimes because his ‘arguments’ are so full of holes just waiting to be poked.
February 16th, 2010 at 10:50 pm
Now I guess I won’t be able to flip that double-height shipping container near the Olympic flame downtown. The one that’s been converted into a movie theatre. Jim, you’ve ruined my plans…
February 16th, 2010 at 10:26 pm
Hey Grampy, you really should scroll back a little and check out the astonishing number of times you reference excrement in your posts. EVERYTHING is poo – related with you…. references to me, Dave, the East Coast, the West Coast, the media, Halifax, Vancouver, the Olympics, global warming, Trudeau, the Third World…. *EVERYTHING*. YOu are *the* most fecally obsessed old bastard I’ve ever met, so I really have to ask:
Does the shit fascination come from some sort of scat fetish or have your ancient and crusty bowels finally let go for good, forcing you to constantly think of nothing more then how to avoid voiding yourself in public?
I gotta say buddy, feel free to call me every name in the book. I’ve got 2 careers and a great life on the go out here. Unlike you, I *like* where I’m living, and if you check my posts I think you can see I’m having a blast. I’d much rather be living this life then be some scat-obsessed old bastard screaming at the world because his number’s almost up and he plainly didn’t get what he wanted out of life.
I don’t agree with Dave at all, but at least he’s to be able to construct an argument.
Christ man, go clean yourself up and examine your life, you’re kind of a spectacle. If you really wonder why I hang out here, it’s because you remind me of everything I hate in the elderly.
Seriously.
February 16th, 2010 at 10:16 pm
This blog is descending into utter nonsense.
Keep it to housing. Seriously.
I found today’s announcement interesting with the 80% LTV ratio for non-owner occupied mortages being the most significant in my mind.
What I’m wondering is how they determine owner vs non-owner occupied? I’ve met a lot of amateur landlords who don’t even claim their rental income for tax purposes.
But if this works it should put a dent in the downtown 600-700sq.ft condo market. If people have to put $100,000 down for what it is essentially a cash-flow negative investment it will certainly spook a few amateurs away.
February 16th, 2010 at 10:14 pm
The Brits will do anything to sell a newspaper. Absolute rags even the Guardian. The Brits can’t win at anything even there national sport Cricket. Ha ha what a name.