Ottawa Says New Mortgage Rules Only to Affect 1% Expensive Markets

This article was last updated on April 16, 2022

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The Liberal government has decided to take steps to overhaul the rules governing a section of the mortgage industry focused on “pockets of risk” in the housing market. The newly elected government is taking a three-fold approach towards its reform as it aims to double the minimum down payment for some home buyers, increase the fees charged to lenders that securitize government-backed mortgages and make changes that allowing lenders to hold more capital against some insured loans in order to curb mortgage fraud and to slow rising levels of household debt.

Industry analysts have labelled these proposed rules as the most prominent changes to the housing industry rules since 2012, i.e. when the previous Conservative government moved to tighten mortgage lending requirements. However, the Liberal government has stressed that its new rules are aimed to affect only the higher-priced properties as they target the most expensive markets, particularly Toronto and Vancouver, in contrast to previous changes that were aimed at the entire Canadian housing sector.

In a press conference held by Finance Minister Bill Morneau in Ottawa, he highlighted that “this is going to help create stability for the overall market by targeting pockets of risk.” He alleged that the government is expecting the changes to affect just 1 per cent of the market or less. Mr. Morneau stated that “we’re not talking about bubbles here. We are talking about ensuring that Canadians take the right approach to investing in a home.”