OTTAWA — Bank of Canada governor Stephen Poloz says it’s time for fresh ideas when it comes to Canadians’ mortgage options.
More innovation would help boost flexibility for borrowers, lenders and investors, while also lowering risks in the financial system, Poloz said. In its spring budget, the federal government announced it would create shared-equity mortgages as a way to provide interest-free loans to help first-time home buyers add to their down payments. The plan, if implemented, would also encourage a lift in housing supply, Poloz said.Poloz said the plan would help make the financial system safer because mortgage risks would be shared between the borrower and the lender.
For borrowers, longer terms would mean they would have to deal with fewer renewals, reducing the risk that they will face higher interest rates. Policy-makers would also benefit from the increased stability related to fewer renewals.
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