As inflation rises and interest rates increase, home prices in Canada for the time being continue to follow suit.
With the federal budget announced recently, a lot of discussion is happening in Ottawa with industry leaders and politicians alike as to what will happen to the mortgage rules later in 2022.
Concepts that are being considered to help the increasing cost of home prices nationally include:
1) Home Equity Loans – A product that has very popular in Canada for the past 20 years is the HELOC (Home Equity Line of Credit). With home prices increasing so drastically over the past five years, owners have been able to draw equity from their homes to buy secondary homes. As a result, limitations to how funds can be used from a HELOC or a simple refinance are being considered to slow down the easy access to funds, Canadians currently have. Will HELOCs be a thing of the past, to help curb real estate purchasing?
2) Gifted Down Payments – Will gifted down payments finally be a thing of the past? Fewer family gifts from parents to kids will mean fewer available buyers when it comes to those who rely on family money for their down payment.
3) Rental Properties – Limiting how many rental properties an individual can own is on our government’s table for consideration. This limitation is also coupled with the potential rule that will require a minimum of 35% down for those who want to buy a rental property (currently 20%).
Real estate is high on the agenda in Ottawa currently and we can expect legislation that will affect how Canadians buy their homes in the future.
To find out what you can do currently to brace for these potential government changes to the mortgage rules, call your mortgage professional today.