Saturday, 05 June 2021
By Leahs Mortgages
Will the New Mortgage Rules Tame Canada’s Overheated Housing Market
Asked if the stress tests and federal bank concerns would help slow home-price growth, mortgage industry expert Leah Zlatkin was much more dismissive.
“My quick answer is absolutely not,” says Zlatkin, a consultant with the mortgage and insurance finding service LowestRates.ca and also principal broker at Toronto’s Brite Mortgage. “I don’t think (they are) going to cool the market at all.”
Zlatkin points out, for example, that a buyer who could have borrowed $500,000 before June 1 would only be limited to $478,000 today because of the testing changes.
“And it really only affects Canadians who were at the highest end of their borrowing ability,” Zlatkin says. “When you look at a bell curve, those are the people at the very edges of the bell curve, they’re not the primary people at the centre.”
Zlatkin says the tests will mostly affect people bringing small down payments to the table — often first-time home buyers. Despite the Bank of Canada’s crash concerns, she says an influx of post-COVID immigrants — welcomed again with the easing of pandemic restrictions — will tend to keep the housing market hot.
