Mortgage Survey Reveals 75% of Canadians Agree With New Lending Rules

ResMor Trust did a survey of 1,000 Canadian across the country 18 years of age or older, to gauge their thoughts on the new mortgage lending rulesannounced by the government a few weeks ago.

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%)

 

 

Regional differences

 

  • 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.

Kelvin

Related Topics

Mortgage News / Mortgages

One thought on “Mortgage Survey Reveals 75% of Canadians Agree With New Lending Rules

  1. It depends on the exact type of loan modoficatiin that you do.If the bank is merely reducing your payments but not reducing the principle value owed on the property then you can expect so see no ding whatsoever on your credit report. When they say they will report to the credit bureau that you will be taking part in loan modifcation that is so the credit bureaus do not see the lower payment and automatically give you a ding for not paying the full amount. That’s a good thing. You shouldn’t see any change in your good credit rating.If, however, the principle value of the property is ulitmately reduced you will see a mark against you for paying less than was originally agreed upon in your contract.Even if this did occur, late and unpaid items on your report affect you less and less as time goes by. Even someone who has had a foreclosure or bankruptcy on their report can reasonably attempt to buy a home after two years have passed and they have used that time to make prompt payments on their debts.If you aren’t buying another home for 4-5 years and you and your wife have a good credit history then you have very little to worry about. Any ding that would occur would have smoothed itself out by then and a payment modoficatiin doesn’t hurt you one bit.Best of luck with your new loan.

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