There seems to be a tug of war brewing between Canadian Mortgage and Housing CEO Evan Siddall, and provincial governments.
On one hand, Siddall wants to see initial down payments rise once again, even as Ottawa brought down payments for insured mortgages to 10% for the portion of home prices between $500,000 and $1 million last year.
However, in a breaking story in this morning’s Globe Investor, Siddall, in a private speech at the Bank of England’s offices in London, called the move an initial step.
He stated the government may need to look to raise minimum payments even further, to offset the effects of low interest rates, and lean against programs by the provinces to reduce the cost of buying a new home, and fuel even more demand.
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One of Mr. Siddall’s ideas is to experiment with mortgage payments, which he suggests could be higher in a booming housing market such as the one we are experiencing now and lower when there is a squeeze on the markets.
There are already new rules coming into effect in January, that will require insurers to hold more capital – that is, your money – depending on the borrowers’ risk profile.
The Canadian Banker’s Association and private mortgage insurers have both rallied against the prospective new regulation, and have come in on the side of home buyer.