Proposed condo rules could make it harder to buy
The federal government is considering new rules to make it harder to qualify for a loan to buy a condominium.
The new regulations would be part of Ottawa’s effort to toughen borrowing guidelines and tamper down Canadians’ debt.
The change would add 100 per cent of condo fees to the expenses considered when a buyer is applying for a mortgage. Currently, only 50 per cent of the fee is considered.
Toronto realtor Brad Lamb says the move is going to push a lot of people out of the market.
“A lot of people are going to get locked out of buying a condo, which, in most cities in Canada, is the most affordable option for housing,” he told CTV News. “It’s a terrible idea.”
The maximum length of a mortgage could also come down from 35 years to 30.
“You’re talking $150 to $200 more per month, which works out to $40,000 in purchase price,” Lamb said.
Craig Alexander with TD Bank says the new rules might not take people out of the market completely.
“It really wouldn’t take people out of the market. It would mean people would end up taking a lower mortgage and buying a lower-priced house,” he said.
Prime Minister Stephen Harper acknowledged the rumours of the new rules.
“The government remains concerned about growth and the level of household debt, and will look at taking prudent steps to moderate that growth,” he told reporters. “We’ve seen some moderation recently.”
There is also speculation the government might increase the minimum downpayment required. Currently it is five per cent.
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