Words of Encouragement For Mortgage Policies To Evolve

In Bank of Canada, New Mortgage Rules by Vancouver Mortgage Broker

“Canada’s mortgage market should evolve in a way that gives Canadians more choice and helps the economy be more flexible, while lowering the level of risk in the system”, Bank of Canada Governor Stephen Poloz said to the Canadian Credit Union Association

He touches on the housing market and how he expects higher priced markets like Vancouver & Toronto to stabilize towards the end of 2019, but the key message in his speach are words of encouragement for mortgage lenders … and borrowers!

While Canadian homeowners and financial institutions have been well-served by our mortgage market, “we could look at ways to develop a more flexible mortgage market that gives more choice to customers, lenders and investors, while making the market safer and more efficient.” says Poloz.

The Governor discussed three areas where Canada’s mortgage market could be made more flexible: diversifying mortgage terms to encourage longer loan terms, developing a market for private mortgage-backed securities, and encouraging different mortgage designs. This includes shared equity mortgages, which should help improve the resilience of the financial system and the economy’s ability to adjust to shocks.

Whether those areas are the best to focus on to make the market more flexible is up for debate … but it is encouraging to hear these words from our Canadian government as it means they are seeing the need to expand options for mortgage consumers.  The stress tests have reduced options for Canadians and sometimes have them hand-cuffed to their banks so lets trust that favourable policy changes are ahead.