Mortgage crackdown a threat, broker says

January 5, 2018



Dustan Woodhouse

Vancouver-area mortgage broker Dustan Woodhouse fears that the federal government is moving too fast with mortgage regulations and that it could threaten the national economy.
Woodhouse is referring to mortgage lending rules released by the Office of the Superintendent of Financial Institutions (OSFI) that took effect January 2018.
OSFI is setting a new minimum qualifying rate (“stress test”) for uninsured mortgages—those with down payments 20 per cent or greater of their home price. The rules now require the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada (currently 4.89 per cent) or 200 basis points above the mortgage holder’s contractual mortgage rate.
“I believe they’re trying to fix a problem that doesn’t exist,” said Woodhouse, a senior broker with Dominion Lending Centres.
“I genuinely believe the greatest threat to the Canadian economy and real estate sector is government overregulation. The government has made too many changes too fast. They’re not giving things time to settle in. I’m a little worried they’re pushing on the brake pedal harder than they realize.”
Woodhouse said that forcing homebuyers to take on larger mortgage payments will impact the overall economy.
“If the economy contracts just a little bit, Canadians who have big mortgage payments will continue making them and won’t spend money elsewhere in the economy,” he said.