Nov 21, 2023, 17:03 PM
by
Mortgage Professionals Canada
FOR IMMEDIATE RELEASE
November 21, 2023 – Toronto, Ontario
Mortgage Professionals Canada (MPC) recognizes the steps Deputy Prime Minister and Minister of Finance Freeland outlined today to help improve mortgage affordability, as well as increase housing supply and rental stock.
While MPC acknowledges the federal government’s reiteration of the existing policy that reapplication of the stress test is not required on renewals, switches, and transfers of insured mortgages, the association is calling for this to apply to all mortgages. Only 27% of Canadian mortgages are insured, versus the uninsured majority at 73%, according to the latest Canadian Mortgage and Housing Corporation report.
This would provide Canadians with choice and allow consumers to find the financing solution that best fits their needs and budget while offering some relief. In today’s interest rate environment, this is a critical move. There is a wave of renewals on the horizon, as two-thirds (65%) of Canadian mortgage holders are up for renewal over the next 3 years, including one in five (19%) over the next year, according to MPC’s consumer research.
“Almost half of non-owners think they will never be able to buy and more than two-thirds of homeowners are anxious about renewing in the current interest rate environment," said Lauren van den Berg, President and CEO of MPC in response to today’s tabling. “We consider the clarification from the government that the reapplication of the stress test is not required for insured mortgages as a successful result of our advocacy. We were pivotal in bringing this important development to light.”
The ‘Canadian Mortgage Charter’ is also a step to better protect mortgage holders at renewal. This codifies the Financial Consumer Agency of Canada’s ‘Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances’ introduced in July.
There is more work to be done. The association will continue to push for further for actions to improve affordability, on behalf of consumers and the Canadian mortgage industry. This includes:
1. Introducing a return to 30-year amortization periods for insured mortgages to allow greater opportunities for home ownership and to level the playing field for all homebuyers.
2. Eliminating the stress test on all mortgage renewals, switches, and transfers.
3. Increasing the insured mortgage cut-off from $1 million to $1.25 million, and indexing it to inflation to better reflect today's housing prices.
4. Granting a digital income verification tool to the mortgage industry to help crack down on fraud.
5. Establish a permanent national housing roundtable, bringing together all orders of government, industry, and the not-for-profit sector.
As the national mortgage industry association, MPC will continue advocating for the federal government to enact meaningful measures to keep the dream of homeownership alive for Canadians.
About Mortgage Professionals Canada
We are Canada’s mortgage industry association with over 15,000 members and more than 1,000 member firms. We are a non-profit association representing mortgage brokers and agents, as well as banks, lenders, insurers, and service providers, making up the largest network across the country.
We are proud to be the industry that provides Canadians with choice when making the most important financial decision of their lives and helps people achieve the dream of home ownership. You can find one of our licensed members at findmeabroker.ca.
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