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OSFI Mulling New Restrictions on Mortgage Rules

OSFI Mulling New Restrictions on Mortgage Rules

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    While these initiatives are considered late by many, the Office of the Superintendent for Financial Services (OSFI), also known as the federal banking regulator, is mulling new restrictions as per their mandate to control and manage risk to the Canadian Financial System. Back when the National Housing Act was hatched, the government utilized its artillery of financial agencies to provide home financing programs for the average Canadian. Before the launch of this valuable government program, which later became the Canada Housing and Mortgage Corporation, most wealthy or well-connected people could access secured lending privately in this country. 

    The success of these programs, as well as the Mortgage-Backed Securities (MBS) and Canada Mortgage Bonds (CMB), have been widely popular, making more Canadians achieve their goal of homeownership. So successful that many Canadians who participated became comfortably wealthy by leveraging their personal property and purchasing investment properties.

    Similarly, the chartered banks that administered and underwrote these big loans benefited from unfettered growth. Near-limitless growth in a protected industry, with the majority of mortgage portfolios backed by the government for loan defaults, large spreads between borrowing (money from the central bank) and lending (money to the mortgagee) – little obstacle existed that could impede their success.

    Key Highlights

    • Mortgage restrictions have increased significantly since the 2008 financial crisis.
    • OSFI’s proposed restrictions will make it harder for many borrowers to qualify for prime lending.
    • Further restrictions will make housing more unaffordable for many Canadians.
    • Restrictions will not curb the surge in housing prices once rates trend back down.

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    Short History of Canadian Mortgages

    The housing market has boomed for decades since Pierre Trudeau, as immigration became the leading aggregator of Canada’s growth strategy. But in 2008, the financial crisis rattled the US housing market prompting Canada’s federal banking regulator to swing into action to avoid a similar potential fate north of the border. Canada’s housing market fared well due to the actions taken; exceptionally noteworthy was Canada’s resilient delinquency ratio (mortgage payments in arrears).

    That same year, the regulator rescinded the 40-year amortization on mortgages it had hatched a year earlier. Since 2008, the federal banking regulator has been on the path to stabilizing Canada’s housing market by introducing restrictions to the prime mortgage lending guidelines.

    Before the 2008 financial crisis, it was a time of cheap money and easy mortgage approvals for Canadian borrowers. For those who didn’t get a taste for it, here is a list of what easy money looks like

    • 40-year amortizations – you could stretch your mortgage repayment by almost half a century, which means lower monthly payments on more money borrowed.
    • 100% financing – no down payment was needed (only the government was on the hook in case of default).
    • No stress test – you could qualify on your contract rate – fixed or variable. 
    • No GDS limit – your income did not limit your maximum household expenses if you had strong credit.
    • Default insured rentals – only needed a 5% down payment to purchase a rental.
    • Default insured refinances – equity takeouts to remortgage to 95% Loan to Value.
    • Cashback mortgages – lenders could give cashback in exchange for a higher rate.

    Easy Money, Cheaper Homes

    Not only did you not have to stress about the stress test, but you could also qualify for a mortgage of more than 5 times your income if you had excellent credit. Additionally, you didn’t have to put down any of your own money and could also get cashback for furnishings in exchange for a more significant profit for the lender. Buying a home or a rental with cheap insured money was a no-brainer – who in their right mind wouldn’t buy a home if they had a regular paycheck? Mind you – these were also times of higher interest rates, smaller incomes and rent control. Yes! Rent control meant there was no incentive to buy – you could live in the same place for less and invest in the easily accessible stock market instead. 

    Then came July 2008, when after allowing 40-year amortizations for a brief period, the government reduced the maximum amortization of insured mortgages back to 35 years. In February 2010, concerned that Canadians were continuously refinancing their mortgage to 95% loan-to-value (LTV), the government reduced the LTV limit to 90%. Additionally, investors needed a 20% down payment on rentals instead of 5%. Then in January 2011, the government dropped amortizations down to 30 years and refinancing was limited to 85% LTV.

    Stress Test Debuts with More Restrictions

    The multiple restrictions we know today came into effect in June 2012 when the government limited insured mortgages to 25 years of amortization and introduced limits to debt service 39% GDS  (Gross Debt Service Ratio) and 44% TDS (Total Debt Service Ratio) of the borrower’s income. They also constrained refinances to 80% LTV and insured properties below a price tag of $1 million. In December 2015, the government tiered the minimum down payment with an additional 5% with a purchase price exceeding $500,000. In October 2016, the second part of the stress test, also known as the internationally agreed Basel I, came into the place where all insured mortgages had to qualify at the benchmark rate, which was 2% higher than a typical 5-year fixed rate at 4.64%. Previous to this, only variable mortgages and terms lower than 5-year fixed had to qualify at the benchmark rate. 

    In the same year, in November, all lenders needed insured mortgages to follow the insured lending criteria and be limited to occupied residences, 25-year amortization and a maximum home price of $1 million. This limit applied even if the borrower put down 20% or more down payment, at which point the lender paid for the default insurance on the back-end (portfolio insurance). Many smaller lenders stay competitive in the mortgage market by back-end default-insuring mortgages which costs less to pass the savings to their clients. This change effectively closed default-insured refinances and purchases for rentals. Here comes the gravy boat: this last change handed a massive advantage to the banks by increasing their market share and allowing them to raise mortgage rates.

    Expanding the Stress Test

    The stress test was expanded by incoming international Basel II guidelines in January 2018, similar to what we know today. All mortgages, insured or uninsured, had to be stress tested by the greater of the benchmark rate or the contract rate plus 2%. Additionally, that year, the government eliminated any circumvents to limit any combination of mortgages on any one property to the qualified and designated loan-to-value (LTV) ratio. For example, if the property was uninsured, it was limited to 80% LTV maximum regardless of whether it had a secondary mortgage charge. Four years ago was the last time the federal banking regulator tweaked mortgage rules mainly in line with internationally accepted Basel II guidelines. 

    With all these changes, the regulator intended to curb the unaffordability in the housing market, but then the pandemic hit. Initially, home prices fell in tandem with the government slashing its policy rate to assist with interest-carrying costs for Canadians. In addition, the government increased its mortgage bonds buyback program, known as quantitative easing, while fueling Canadians’ wallets with income replacement.

    Housing unaffordability was a hot issue before the pandemic, as home prices had already surged quite a bit, making it a crisis during the pandemic.  Many Canadians aptly believe housing went into bubble territory – making it very difficult to buy or rent for reasonable costs.  The inflationary pressures from surging interest rates made qualifying for a mortgage even more difficult.

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    Federal Banking Regulator Offers Banks Another Helping Hand 

    The federal banking regular says banks are exposed to heightened risk due to current market conditions and over-leveraged borrowers in Canada. It wants to restrict mortgage lending in the country further to make the debt more manageable for everyone. It may have good intentions, but the proposed restrictions may make housing even more unaffordable – by moving higher-risk borrowers into costlier subprime or private lending options to afford their shelter.

    These heightened risks due to housing unaffordability are the regulator’s own making. With lenders’ prime rates dropping by a whopping 150bps (that’s 1.50%) in March 2020, the regulator must have seen possible risk scenarios with returning prime rates to pre-pandemic levels. Six out of 7 biggest lenders in the country only offer fixed payments on variable-rate mortgages, making it easier to carry and stress-test mortgages. 

    Housing was in limited supply before the pandemic. The remote work, the possibility of making it easier for many to relocate to more affordable communities and cheap mortgage money exacerbated the housing unaffordability crisis. At this point, the federal banking regulator was quiet. At the same time, in Oct 2020, the BoC governor went out of his way to provide incorrect advice, namely that rates, within the BoC’s control, would remain low for a long time, hinting towards a 2023 timeline. The Federal banking regulator could contradict statements or have stepped in to change the criteria for stress-testing on variable-rate mortgages (VRM) by requiring a higher effective rate factor for qualifying. This could have helped protect Canadian borrowers while limiting their qualifying amounts.

    Lack of Stewardship – Too Little, Too Late

    It wasn’t until September and October last year that many Canadians heard the word and the warnings on trigger rates. It is hard to find credible sources discussing these VRM risks before mid to late 2022 – even the government’s paper discussing these risks only came out after the media had reported on it. It is hard to believe this is the case, considering that a trigger rate is a sensitive component to a large portion of active mortgages across the country. The lack of disclosure around what could end up costing a borrower much more than they had signed up for is alarming in this case, as alarming as the lack of fixed rate penalty disclosures we read about every few months in the Globe and Mail. The regulator could have reviewed banks before prime rates started to rise to see if their representatives were informing their variable-rate mortgage (VRM) clients about the added risks of trigger rates or trigger points.

    The advisor’s fiduciary duty is to inform the client of risks when offering products. Provincially regulated mortgage brokers are expected to review the mortgage commitment thoroughly with their clients to ensure they understand the document they are signing—so why can’t mortgage specialists or banking advisors at a bank be held to the same expectations? 

    It is questionable sometimes if government departments communicate with each other, or at least the right levels within do. StatsCan keeps good records of all the happenings in this country. They know when core inflation is creeping up – or when one specific industry, such as housing, has a much higher inflation rate than all the other industries affecting the inflation metrics. They must share this data with the Bank of Canada (BoC) for the Bank to make decisions on curbing inflation. So why is it that when decisions have been made to curb inflation that can affect the housing market drastically, the BoC doesn’t work with OSFI to make a concerted effort to protect Canadians? Or if they regularly do, and did in this case, how did we still end up here? The BoC could provide OSFI and Canadians with meaningful, realistic, transparent guidance to manage their expectations. There was no question that we were heading towards unsustainable territory as property prices climbed 2-5% per month across most of the country. 

    Reactive, Not Proactive Mortgage Restrictions to Curb Debt

    OFSI launched its public consultations on the B-20 Guideline by inviting stakeholder feedback on the new proposals by April 14th. In the spirit of our opinioned transparency, we’d say that the government is 3 or 4 years late trying to stop real estate from bubbling over. But they can avoid making the same mistake in the consumer credit market by sharing a similar focus toward more diligence on grantors and facilitators of consumer credit (for example, on car loans, credit cards and lines of credit). I think many Canadians would agree with us.

    When home prices showed alarming increases per month, the government(s), including the Bank of Canada, did nothing substantial to slow it down. The inflation crisis came at us on the road with ignored bright lights. Only when it was too much did conversations start that could have an impact. The consumer debt crisis is now coming at us with bright lights, and it’s still possible to act, so I wish equal attention is being spent on credit grantors as it is being spent on mortgage rule changes 4 to 5 years too late.

    The public consultation and review will look at the regulator’s proposals and the impact this may have on borrowers and lenders. Its goal is to enhance the credit quality of residential mortgage assets and underwriting practices of federally regulated lenders. Let’s review the recommendations in detail and how they might impact borrowers from our past experiences to lenders’ behaviours.

    Loan-To-Income (LTI) & Debt-To-Income (DTI) Restrictions

    The introduction of this restriction will limit how much mortgage debt and the total debt you could carry concerning your income – as a ratio or percentage. Based on your income, your mortgage debt could be limited to 3.5 times that – or 350% of your income. Your total debts could be limited to 4.5 times or 450% of your income. Those borrowers who do not meet these restrictions will be considered high-risk. The regulator will also provide a clear definition of income so that consistent underwriting rules are applied and standardized for prime lenders. If and when they should pass, these proposals will restrict each prime lender to limit their higher-risk mortgage originations to 20% to 30% annually.

    Over the past decade, home equity lines of credit (HELOCs) that have existed inside re-advanceable collateral charge mortgages have made it easy for Canadians to get complacent and, in some cases, greedy for cheap debt. Within these collateral charge mortgages, lenders allow you to re-advance up to 65% value of your home as revolving credit products such as HELOC or credit cards. Whereas the rest of the 15% of the 80% allowable on an uninsured (not default insured by CMHC, so the risk is the lenders) collateral charge mortgage can be used towards a typical term loan – commonly known as a mortgage when secured against a property. 

    HELOCs are mainly held at the big banks that were able to be creative with underwriting guidelines on uninsured mortgages—primarily allowing them to make exceptions to income or lending ratios over and above federal guidelines when the mortgage is not default-insured. These are the same ratios that the regulator now wants to review reactively and curb any exceptions to uninsured lending. 

    As these types of mortgages are re-advanceable – any principal paid down is reapplied to the limit – making it easy for you to use it again anytime. At the same time, lenders encourage Canadians to take advantage of their home’s equity to cover anything and everything – from renovations to trips to buying cottages – all on debt that has recently become a lot more expensive due to Bank of Canada rate hikes.

    We are not suggesting that there shouldn’t be exceptions based on each client’s specifics and circumstances. Of course, that is what quality advice and underwriting should be. After all, a couple with extensive savings with 5 properties with a mortgage only on one can likely take on more risk than a single person with very little savings who has 2 properties both mortgaged. We suggest that these risk-mitigating factors should have been considered and implemented before we ended up where we are now. 

    The industry will receive the regulator’s second point to define income consistently across the board, creating a level playing field for all the players. The big banks make money, while the smaller lenders keep the market competitive by eating into their profits. Generally, big banks can take on additional risk due to their size and ability to lend their funds. By redefining income, the risk big and small lenders take on the income denominator of both the loan and debt ratios will create more equality between them.

    The regulator’s third point is one of severe contention within the mortgage industry. While limiting the high-risk files that federally regulated lenders originate is an admirable step in the right direction for risk reduction, it does beg the question, who will the regulator ultimately protect? We believe that limiting the number of high-risk files at the prime lenders will push these clients to subprime lending, such as more costly B or private lenders. This is counter-intuitive to addressing housing affordability as it will not impact the actual price of homes enough. Instead, it will limit how many can qualify for mortgages at the best rates. It may make a dent, although hard to quantify, as the population continues to rise through immigration. In the same vein, it is also counterproductive to reducing market risk as more borrowers will have to take on more expensive debt.

    Debt Service Coverage Restrictions 

    Debt Service Ratios measure the obligations versus the borrower’s income. Currently, the legal limit for insured mortgages is 39% for gross debt service ratio (GDS) and 44% for total debt service ratio (TDS). The GDS measures household obligations such as mortgage principal, interest, taxes, and heat and maintenance fees as a percentage of the borrower’s income. Whereas TDS also includes debts outside of the household obligations, such as 3% of credit card and unsecured line of credit balances (this repayment is higher at 5% of the balances in Quebec), monthly loan payments and spousal or child support.

    Uninsured mortgages currently do not have federally regulated limits, as the default risk and onus are on the lender for these types of mortgage loans. The lender assigns risk to each file on a case-by-case basis. The assigned risk status of each file means a sliding scale based on the lender’s internal underwriting criteria. The regulator is also looking to restrict these debt service ratios on uninsured mortgages. They suggest regulating this limit on a graduated or sliding scale for the debt the lender can hold in this higher-risk category. Thus giving the lender less discretion and making uninsured lending rules more challenging.

    Debt service coverage restrictions will target conventional mortgages (those with down payments of 20% or greater), mainly affecting borrowers with mortgages at the banks. However, as banks cherry-pick the clients they decide to take higher risks on, many others may be pushed into subprime lending with higher rates. Further, as private mortgages come up for renewal, it could drive more toward a seller’s market if they can’t qualify to move from a subprime lender to a prime lender due to imposed risk targets.

    Interest Rate Affordability Stress Tests

    The stress test qualifies the borrower at a higher qualifying or benchmark interest rate to mitigate risk if rates rise either during the mortgage term or when the mortgage comes up for renewal. The stress test was made for just such market conditions as we are experiencing during this inflationary period. The policy rate surged ninefold within 9 months between March and December 2022.

    As discussed earlier in this article, there have been a few tweaks to the original stress test introduced in June 2012; the last and foremost was a lifesaver for testing secured lending in Canada to mitigate a severe economic tightening cycle like we are currently having. As rates surged, borrowers who qualified on a 2% or 3% more than their actual rate could afford their payments. However, as fixed rates become more expensive due to bond traders’ expectations of the time it would take for the BoC to cut rates, variable rates surged in their popularity. 

    The current market scenario also flaunted the impractical risks of a uniform interest rate affordability stress test for all mortgage terms and types. Traditionally, fixed rates have been more popular; however, their appeal diminished as variable rates were drastically lower during the pandemic. The lower rates allowed borrowers to qualify for a bigger mortgage on a variable rate when properties surged in value during the pandemic. This is one of the unforeseen risks of the stress test that the regulator wishes to avoid for future borrowers. For this reason, OSFI has decided to restrict further the stress test based on mortgage types and terms. 

    This means that a 1-year fixed mortgage term may have a different stress testing factor than a variable-rate mortgage or a 5-year fixed-rate mortgage. The idea is to reduce the overall risk for borrowers who choose a shorter term or variable rate over a 5-year fixed mortgage term. Testing borrowers’ ability to afford higher debt payments may be effective in avoiding adverse financial shocks in the future—or payment shock at renewal.

    It’s not entirely clear if these proposals will solve the current issues more efficiently than higher interest rates or more home supply. Those borrowers who took out mortgages during the pandemic when rates were the lowest in history are now approaching the historical average. Many with fixed payments on their variable-rate mortgage (VRM) suffer from over-amortization. Their mortgage balances balloon with a requirement to pay down the principal upon maturity, reducing their choices at renewal time; meanwhile, their property values have dropped significantly. 

    It should be noted that most of these proposals will impact future homebuyers as they enter the market, impeding their ability to qualify for a bigger mortgage on top of the already historically high stress test rate. They will either reset their expectations or shift to a lender offering subprime mortgages not regulated by OSFI.

    Attacks on Qualifying, Not Quantifying

    This year, the government introduced a few laws to curb the pressure on the housing market. But by the time they became law, inflation had viscerated the housing market.

    This year the government introduced two laws. First is the Anti-Flipping Tax, which will tax any property bought and sold within fewer than 12 months as business income. Before this law, that same property would have been qualified to be taxed as a capital gain – meaning that only 50% of capital gains are taxed at the seller’s marginal tax rate. However, if it is considered business income, 100% of the gains will be taxed at the seller’s marginal tax rate. 

    Secondly, the government introduced a 2-year Foreign Buyers Ban, prohibiting foreigners from purchasing properties in Canada. The change is in the right direction, though not well thought out—and maybe too late. This ban only occurred this year when the market surge had subsided. The actual effect of the ban will be hard to gauge as many “foreign” buyers, such as international students and temporary residents, are exempted from the ban. 

    Many in the housing industry believe the ban will have the opposite effect from the government’s intention. Foreign buyers purchase an investment property in Canada on preconstruction, thus providing the monetary stimulus for the builder to start the project. As investors, they add much-needed homes to the rental housing supply, thus helping curb housing unaffordability in this country as rents surge. With this rule in place and the ongoing rate hike, it will likely spook future investors from the Canadian real estate market.

    These rules and other rules specific to some regions, such as the vacant home tax in Toronto and Ottawa, which came into effect this year, are causing would-be investors to be wary of the market. The government’s goal may have been to limit selling to those who may not already own property. Conversely, they are affecting shelter costs for even those who rent by restricting the supply of rental homes. Someone has to own the homes – even if they are rented out to someone else. Making it more challenging for investors to buy will keep fueling the current housing affordability crisis by contributing to the lack of supply.

    People generally understand that our free-market economics work well with supply and demand control mechanisms. If you want to reduce the price of something, you increase the supply. But efforts haven’t been made to improve the housing supply – instead, increase restrictions on mortgage qualifying. Yes, billions have been spent on the First-Time Home Buyer Incentive (FTHBI), the federal government’s shared-equity program administered through CMHC. The qualifying criteria were still strict for many borrowers to increase the program’s intake.

    By increasing home supply and not stifling investments, the government will quickly realize its goal of making homeownership more affordable. Whether in the form of ownership or a rented shelter, every Canadian desire to have a roof over their head. This was the lead premise when the National Housing Day was hatched, and from there, housing initiatives that the federal government has committed itself.

    On Borrowed Time – One Simple Solution to Housing Affordability

    Everything in life costs money. Time and money are both a form of currency – by solving problems, you can save a little or a lot of both.  The longer you leave a problem unsolved, the more you pay in both currencies.  Either you pay now to build homes – or you pay more later. Later, you could pay more in the form of added interest costs, inflation, and changes in the price of labour or materials. This idea can be easily illustrated simply by looking at how mortgages work. 

    You can make a more significant down payment to save on interest-carrying costs or stretch out the mortgage and pay more interest over time. Either increase your regular payment or stretch your mortgage repayment by years. You either pay down the ballooning balance on your static payment variable-rate mortgage that has hit its trigger point. Or when the mortgage comes up for renewal, you’ll get a payment shock with a reduction in the repayment schedule and the inclusion of the unpaid balance.

    In that same way, either we build more houses now to increase supply – or the cost of building those houses in the future will be much higher when labour and material constraints make it more expensive. If we choose to delay a resolution to this critical issue, more Canadians might end up suffering from homelessness in the future. Instead of deferring the issue, plans must be made to propagate home building. We know from our recent experiences with inflation that labour and materials costs can rise unexpectedly. 

    Most economists expect that the BoC will get inflation under control, though maybe not back to its original target of 2%, causing the borrowing rate to fall again. High immigration targets and falling rates could make for a very robust housing market comeback, possibly causing house prices to surge in the double digits annually once again. This buying spree could put a much-expected strain on the housing supply as many buyers who could not afford will suddenly bid on the same properties for less. Regardless of what the federal or provincial governments say, more housing is needed in this country promptly to bring affordability and demand into equilibrium. 

    Carbon emissions and social equality are also issues that have exasperated the concerns connected to a lack of housing affordability. More and more corporations are looking to have employees return to the office as more Covid restrictions ease. For multiple reasons, corporations with offices centred in metropolitan areas are looking to get employees back in the office. Their primary reason is to find internal efficiency while refilling the large office spaces they have committed to long-term leases with large payments. Having employees return to the office has the added effect of costs, including having to spend more on gas and transportation, fueling inflation and carbon emissions.

    A solution we often hear about but see little movement towards in trying to solve the issue of home supply and lack of utilizing the giant office towers and buildings throughout the downtowns of Canada’s big cities: Converting office space into condos, with this, we could increase the availability of residential housing. As well, employees working from home will reduce carbon emissions. Secondly, as the new conversion will be downtown, this will have the added benefit of more housing in areas where people don’t need to drive, even as they spend time outdoors on the weekends when they are not working.

    During the pandemic, we heard there was a marked increase in domestic violence since many were stuck without having options to move out. Lack of housing and the lack of ability to work from home significantly reduced many having no way to work – or remove themselves from abusive situations. Employees having the ability to work from home while being able to find affordable rental accommodations can ease these and other social burdens for many.

    When employers asked employees to return to the office, it left many to choose between spending more time with their kids at home – instead of in traffic during their commutes. Parents spending more time with their children is better for children’s physical and psychological development and good for society. This particular issue disproportionately affects women – many had to choose between their careers and their families.

    Simply with one change, the federal and provincial governments can do more for society than the billions of dollars they keep spending to solve the issue of reducing domestic violence, carbon emissions, homelessness, or housing unaffordability.

    Sticky inflation could have unseen consequences as living costs would stay elevated, thus making it harder for the average person to set aside money towards their down payment or move away from the city to find affordable housing. Current homeowners may need to downsize or leave the city to make housing more affordable for themselves and their families.  Fewer people can apply for jobs in the city if remote work doesn’t increase, significantly decreasing the future pool of job candidates. 

    The government has spent more than $4 billion on national housing initiatives, which haven’t produced the expected results. The number of homes needed to meet goals to provide housing for the country keeps increasing, and the solution delivery date keeps being delayed. Delays happen as political and economic impetus keeps changing, pushing a solution further from realization. Suppose the government and industry make remote work a pinnacle of employment equity while providing tax incentives for corporations to renovate and convert commercial real estate into residential condos. We could see a severe lift to the stifled housing supply in that case.

    As more Canadians choose to work from home, corporations that own the commercial real estate downtown would look for ways to mitigate losses by converting them to residential condos, thus increasing the housing supply.  The increased housing supply would make houses more affordable to buy or rent. Spouses could afford to leave abusive domestic relationships. Women would no longer have to choose between career and family – thus adding the much-needed labour supply that our economy needs in the long run as the population ages. As more people work from home and more can afford to move downtown into the newly converted residential spaces, it would have a marked effect on reducing carbon emissions. In the long run, any government that takes this road would likely gain public trust. But they will come with short-term growing pains – as all changes do!

    Final Thoughts

    In conclusion, it could be surmised that many simple solutions exist for some of society’s big issues. It takes open-minded thinkers willing to go against the grain of economy and society to bring these solutions to reality. The federal banking regulator and other facets of the government’s financial risk control mechanisms can continue to focus on the issues in their silos or collaborate to find extra-ordinarily simple solutions for their combined problems. The government has good intentions as it looks to solve housing affordability by making it tougher to qualify for a mortgage. Still, the solution it proposes by restricting mortgage underwriting further may only make things worse.

    The housing market may be in a lull for the time being, but the shortage of housing supply is an ongoing and endemic problem. Over the next year or two, Canadians should expect the housing market to return with roaring demand. Immigration will be reinstated, and ongoing reduction in inflation will push down borrowing again. If your ultimate goal is homeownership, prepare your application and gather advice to purchase well before the next surge in the housing market returns. If you’re looking for guidance on what to do next, contact nesto’s commission-free mortgage experts and lock in your rates today. With decades of experience between them, our team can help you navigate these changing markets and find the best solution for your needs.

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