Mortgage Rules

[robert james]

Ottawa is jerking around again.. http://www.cbc.ca/news/business/story/2 ... tened.html

[MultipleOffer]

lenders are offering 2.94 5yr closed again.

[DAB]

only applies if u have less than 20% down. good regulation

[curious]

What is the best rate for 4-year closed mortgage?

[jesse1]

only applies if u have less than 20% down.

Nope.

[jesse1]

July 9th. Buy now. And I mean NOW... or be priced out forever. lol

[thirdlittlepig]

This is how the mortgage regulations should have been from the start. The damage is done by switching regulations, loosening up, so you have to tighten later. The real estate market forces are like trying to change course with an ocean liner. If they wanted stability in the market they could have had it, but they are deliberately tinkering with it trying to "fix" things. It was fine before they started trying to "improve" it in early 2000's.

[tdma800]

lenders are offering 2.94 5yr closed again.

Thats cheap!

[eyesthebye]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

[thirdlittlepig]

The Financial Post also added that there would be an upper limit of 1Mill for government backed (presumably residential) mortgages. That could affect speculators and those buying more house than they need, and yes, even some customers in the detached market, especially in the lower mainland. The idea that only rich folks sign up for more expensive homes with money just burning a hole in their pocket is not entirely accurate.
And while baby boomers banking on their home are going to take a hit, if they have owned for many years, they can take a 20% drop and still be ahead of the game in some parts of B.C.
The new regulations will also affect anyone (detached or not) who was using their house as an atm. When their term is up they can only get 80% of value of home. Try doing the math on that when home values are slipping. People in high end homes (and regular folks) do borrow against their home for other things too like renovations, vacations, kids college, buying a second home. So it is going to affect some people's life style and the economy as well.

[tdma800]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

I was arguing with someone last week about renting is throwing money away and she said "well, I could instead save my money in a tax free savings account" - lol

[timber2012]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

I was arguing with someone last week about renting is throwing money away and she said "well, I could instead save my money in a tax free savings account" - lol

Yep - interest on a mortgage for 30 years surely isn't throwing money away

Gotta love RE pros - about as clueless as they get.

[ArthurFonzarelli]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

You got any stats to back that up? I'll bet you at least 50% of SFH purchases in COV require CMHC insurance. And a hell of a lot higher for FTBers.

I suspect it will impact all segments - unequally of course - but will impact all segments. We are in the market for a SFH right now but if a really nice 3-level end unit TH came open in NVan we'd probably pick that up if prices dropped enough. It's all inter-related.

My theory all along has been that it's marginal buyers keeping the bubble going, and that prices will track carrying costs of marginal buyers. Drop max am rates from 40 yrs to 25 yrs, raise rates a couple of points, and prices overall in the market will track carrying costs for people stretched to the max, even if they are only a proportion of the market. I know there are lots of other factors - price:rent ratios, speculation, hype, price:income... but I think carrying costs of marginal buyers will be a huge factor.

[tdma800]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

You're quite accurate, and its a minority of buyers in Vancouver need mortgage insurance. I agree that it will affect mostly some condo buyers, and that it is cash heavy buyers keeping things going.

[SethM]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

How so? You bought your house with 10% down and have a huge mortgage at a low interest rate. People like you are very vulnerable.