2016 Mortgage Rules


On October 3, 2016 federal Finance Minister Bill Morneau announced a series of proposed changes to federal policies and legislation affecting mortgage loan insurance, mortgage lending rules, and tax treatment of capital gains from principal residences for foreign buyers:  

  • standardizing mortgage insurance eligibility criteria for high- and low-ratio insured mortgages, including a mortgage rate stress test;
  • closing loopholes surrounding the capital gains tax exemption on the sale of a principal residence; and,
  • consulting on the distribution of risk in the housing finance system.

CHBA advocates that the prime objective of federal housing policy should be to support stability and predictability in Canada’s housing markets and housing finance system. CHBA has undertaken analysis of the mortgage rate stress test and is very concerned about the impacts resultant reduced access to mortgages will have on potential first-time home buyers. CHBA is also concerned about the impacts these rules will have on slower markets.

CHBA has developed Housing Markets and Affordability: Strategic Considerations, which was submitted to the National Housing Strategy consultations. It provides positive solutions to achieve the government’s objectives that at the same time, protect access to housing for first-time buyers and address housing affordability.

In terms of foreign buyers, CHBA supports CRA’s efforts to ensure that buyers are playing fairly and receiving equal tax treatment.

In terms of mortgage rules, CHBA will continue to stress three major points in the time ahead:

  • the importance of focusing on increasing affordability for those households most directly impacted by government policy changes, young families and new Canadians that make up the majority of first-time homebuyers – remedial actions are definitely required;
  • the need to wait until the full impacts of this round of federal interventions are clear before introducing yet more changes into an already-complex situation;
  • the need to provide all housing market participants with much better indicators of what is actually happening.

Report: Assessing the Impacts of Changed Criteria for Mortgage Qualification (October 2015)

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