Variable Rate Mortgages the 'Primary Target' of New Banking Regulations

#canadianrealestate #canadamortgagerates #canadianeconomy

The buildup of variable rate mortgages represents a potential risk to households, and the Canadian economy as a whole, according to OSFI President Peter Routledge.

As such, OSFI is looking to build up a margin of safety, potentially making it more difficult to qualify for a
variable rate mortgage than that of fixed.
Links:
The mortgage stress test has helped protect Canada’s housing market in this downturn: OSFI:

https://www.canadianmortgagetrends.com/2023/04/the-mortgage-stress-test-has-helped-protect-canadas-housing-market-in-this-downturn-osfi/

OSFI head says collapse of Silicon Valley Bank was a wake-up call to Canadian banks:

https://www.theglobeandmail.com/business/article-osfi-head-says-collapse-of-silicon-valley-bank-was-a-wake-up-call-to/

Almost one third of Canadian homeowners with a mortgage now have amortization periods of more than 30 years:

https://www.thestar.com/business/2023/04/25/one-third-of-canadian-homeowners-now-have-mortgage-periods-of-more-than-30-years.html

LACKIE: Lifetime mortgages becoming the new normal:

https://torontosun.com/opinion/columnists/lackie-lifetime-mortgages-becoming-the-new-normal

OSFI identifies housing market as top risk to financial system:

https://www.mpamag.com/ca/mortgage-industry/industry-trends/osfi-identifies-housing-market-as-top-risk-to-financial-system/443211

Bank regulator proposes new rules to tighten mortgage lending:

https://www.theglobeandmail.com/business/article-industry-react-osfi-tighten-mortgage-eligibility/

Why variable-rate mortgages rule in the pandemic housing market – and maybe afterward, too:

https://www.theglobeandmail.com/investing/personal-finance/article-why-variable-rate-mortgages-rule-in-the-pandemic-housing-market-and/

Canadian Banks Are Extending Amortizations Over 35 Years To Avoid Defaults:

https://betterdwelling.com/canadian-banks-are-extending-amortizations-over-35-years-to-avoid-defaults/

Canadian home sales slipped 3% in July while average price fell to $662,000:

https://www.cbc.ca/news/business/housing-realtor-canada-1.6142201

Policy interest rate: https://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/

Federal watchdog proposes help for cash-strapped mortgage borrowers:

https://www.theglobeandmail.com/business/article-federal-government-mortgage-borrowers-relief/

Canadian home buyers pile into variable loans, blunting impact of rising fixed rates:

https://financialpost.com/real-estate/mortgages/canadian-home-buyers-pile-into-variable-loans-blunting-impact-of-rising-fixed-rates

Public consultation on guideline B-20: Residential Mortgage Underwriting:

https://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b20-cd.aspx

Federal Budget Includes Tax-Free First Home Savings Account, Mortgage Protections:

https://storeys.com/federal-budget-2023-home-savings-account-mortage-protections/

How high variable-rate mortgages cripple homeowners, hobble housing market:

https://vancouversun.com/business/mortgages/how-high-variable-rate-mortgages-cripple-homeowners-hobble-housing-market

Canada’s Most Misconstrued Mortgage Study:

https://www.ratespy.com/the-most-misconstrued-study-in-mortgage-history-03105681#


Mortgage Financing:
Floating Your Way to Prosperity: https://wowa.ca/static/fixed-vs-variable-study.pdf

Mark Mitchell – Mortgage Broker London Ontario
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