Keep Complaining About The Mortgage Stress Test

It appears to be working!

It is easy to read the headlines. Unfortunately, bad news sells. Let’s look at this week alone:

“Canada’s Housing Market Store Vulnerable”

“Toronto Real Estate Board Asking Federal Government To Review Mortgage Stress Test”

“OFSI Defending Mortgage Stress Test Amid Criticism

“GTA Sales Hit 18 Year Low In 2018”

If you don’t think the Mortgage Stress Test has had a huge affect on the Real Estate industry, think again. The Canadian Government got what they were wished for. But as the saying goes: be careful what you wish for! At Robert Floris’ Mortgage Architects office in Hamilton, Ontario, we have seen the harm it has done to our clients.

Results Of The Mortgage Stress Test

The banks are tougher and we have had to turn to alternative lenders at higher rates. This has not exactly helped people. But some positive news did come out of this week. The Minister of Finance, Bill Morneau, is looking at CMHC to start qualifying high ratio deals over a 30 year amortization, not 25 years. This will lower the qualification payments and help people to qualify. A councillor in Calgary wants to lend based on local conditions (in a recession) and not use the stress test. Economists are questioning the new stress test. Their arguments are that these tests have affected the entire economy including Realtors and construction jobs resulting in less government revenue.

It is our opinion that it is jobs and maybe not interest rates that they should review. In our humble opinion this is a better correlation of the market.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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