During the past 15 years, mortgage policies from the federal government have made it increasingly difficult for potential home buyers to obtain thethey need. These policy changes have included tougher lending criteria from the Office of the Superintendent of Financial Institutions, as well as higher costs and more conditions for mortgage insurance that is provided by federal agency Canada Mortgage and Housing Corp.
There are many factors that affect home buying, including movements of interest rates, growth of the population, and job creation. The complexity of the housing market makes it difficult to determine the effects of the mortgage policies. In another adjustment to mortgage policies, more buyers have gone to “alternative” mortgage lenders . Those borrowers are now exposed to higher interest rates. Plus, in the alternative lending space, there are risks to the borrowers that they wouldn’t face in the “prime” space .
In response to pressures in housing markets, federal mortgage policies have escalated during the past decade and a half. This looks a lot like the arcade game Whac-A-Mole. I’m comfortable to conclude that the mortgage variant of the game has been unproductive, and has harmed Canadians, by preventing them from making legitimate housing choices that are in their best interests.