117 – Why We Expect Tighter, More Expensive Mortgage Markets

There is a lot of chatter surrounding Canadian real estate, housing prices and mortgage rates.   Vancouver sales have started to drop but not in Ontario. Is there a housing bubble in Ontario? When will it burst?  Part of the answer might be in the next round of changes to Canada's mortgage rules. In today's podcast we talk about how this will affect your ability to obtain a new mortgage or refinance your existing mortgage. This week's guest is Ben Rabidoux, the founder of North Cove Advisors. They're a private research firm that advises big investors like pensions and mutual funds. Ben is predicting big changes in the mortgage and real estate markets in Ontario in 2017. What's changing? As you remember, show #110 focused on the new mortgage rules that came into play on October 17, 2016. These new rules put in place a stress test that would reduce the amount of mortgage a homeowner could qualify for if they were applying for an insured mortgage. This applied mainly to borrowers with a high-ratio mortgage (less than 20% down) but also to those with a regular mortgage as long as they had mortgage insurance. More rules come into play at the end of November 2016. The next set of changes will set limits on what types of mortgages can qualify for mortgage portfolio insurance, and these rules will apply even if the borrower has more than a 20% down payment.