Too Much Tightening?

Mortgage Broker News ~ July 26th, 2017

One big bank is sounding the alarm about recent and future mortgage policies.

“Let’s be clear. A soft landing that eases Ontario and BC house prices and mortgage growth would be welcome news for macroeconomic stability,” CIBC Chief Economist Avery Shenfeld said in his latest report. “But nobody can be too sure of what kind of landing we’re now in. Better to carefully phase in further changes in rates and regulatory policy to avoid piling on to a market that might be facing a less-than-soft retreat.”

It seems policymakers are embracing a more aggressive approach when it comes to mortgage and rate policies, however.

The Bank of Canada recently increased its benchmark overnight rate to ¾% and is expected to implement an additional rate hike later this year.

OSFI, meanwhile, is planning to tweak lending rules in such a way to make qualifying more difficult for many Canadians.

Both of these followed aggressive mortgage changes last year both nationally and provincially – in both Ontario and Vancouver.

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