The main points include:
- 23% of Canadians do not agree with the recent federal changes to mortgage lending rules
- Opposition rises to 30% among non-homeowners, versus 21% who own a home
- 17% indicate that they do not understand the implications of the changes
- A larger portion of non-homeowners (25%) were confused about the new rules versus homeowners (13%)
- 45% of Canadians agree with the changes and the statement “the federal government needs to protect Canadian homeowners.” Support for this statement is stronger among homeowners (at 54%) versus non-homeowners (26%)
- The survey also reveals that agreement with the new rules in the heated housing markets of the Western provinces and Ontario is significantly higher than in the Eastern provinces and Quebec (British Columbia 64%; Alberta 56%; Manitoba/Saskatchewan 47%; Ontario 46%; Atlantic provinces 35%; and Quebec 34%)
Taking a look at these results, if 23% disagree that obviously means that 77% do agree with the changes which seems quite high. This means that over 3/4 of those surveyed believed that the government shouldn’t be insuring the higher risk mortgages of those who don’t have at least a 5% deposit or choose to amortize the loan over 40 years.
This may be true in regards to the 40 year amortizations as in our talks with a few mortgage brokers it seems that many mortgage shoppers could manage payments with a shorter term such as 25 years, however, opt for the 40 year plan for added flexibility and then just make additional prepayments on the loan.
The reason’s behind people agreeing that a 5% deposit should be necessary to purchase a house in Canada is less apparent. Financial prudence? Conservatism?
I’d be interested to see if anybody has any stats on the default rate of 0% deposit or 100% mortgage holders vs people who put down 5% deposits. If anyone has these please let me know.