BCREA Blog
About » BCREA Blog
Share on Facebook
Share on Twitter

BCREA Blog

The BCREA Blog is a platform for sharing the latest education news, economics statistics, issues relating to the profession and links to valuable resources for REALTORS®, stakeholders and the public.

Mortgage Underwriting Changes Could Harm Homebuyers

Published Oct 27, 2017

iStock_000004598824SmallOn October 17, the federal Office of the Superintendent of Financial Institutions (OSFI) announced new restrictions on uninsured mortgages. The changes affect homebuyers and federally-regulated financial institutions.

Effective January 1, 2018, all uninsured mortgages will require a qualifying stress test. A homebuyers with a down-payment of more than 20 per cent will have to qualify at the higher of either the five-year benchmark rate, published by the Bank of Canada, or the contractual mortgage rate plus two per cent. This change follows additional restrictions, implemented in October 2016, which required all insured borrowers to also qualify at the five-year benchmark rate.

BCREA’s concerned this change will negatively impact housing affordability by placing home ownership out of reach in some markets. Our economic analysis has shown that consumers’ purchasing power could be reduced by up to 20 per cent as a result of these changes. Since the new regulations impact a large pool of mortgages, the impact could be significant. 

In August, BCREA submitted a response to OSFI recommending that the government step away from making these changes. Though the government has chosen to proceed, BCREA will continue to advocate for consumers’ rights to ensure appropriate housing options are affordable and accessible.

Read BCREA’s full submission to OSFI here.

See OSFI’s news release here.

Comment

  1. RadEditor - HTML WYSIWYG Editor. MS Word-like content editing experience thanks to a rich set of formatting tools, dropdowns, dialogs, system modules and built-in spell-check.
    RadEditor's components - toolbar, content area, modes and modules
       
    Toolbar's wrapper 
     
    Content area wrapper
    RadEditor's bottom area: Design, Html and Preview modes, Statistics module and resize handle.
    It contains RadEditor's Modes/views (HTML, Design and Preview), Statistics and Resizer
    Editor Mode buttonsStatistics moduleEditor resizer
      
    RadEditor's Modules - special tools used to provide extra information such as Tag Inspector, Real Time HTML Viewer, Tag Properties and other.