“Canada’s housing agency saw a sharp decline in the number of home buyers who qualified for mortgage insurance under tougher rules implemented last fall,” wrote Pete Evans for CBC News on May 30, 2017.
Evans continued, “In its quarterly financial results posted Tuesday, the Canada Mortgage and Housing Corporation said that it insured just over 48,000 new mortgages between January and March, a 41 per cent decline from the previous three-month period.
The value of those loans dropped to just under $8.3 billion, down from $14.3 billion in the quarter that closed out 2016.
The January to March period in question is the first full quarter since Ottawa changed the mortgage rules last October. Among the new rules is a requirement that borrowers pass a “stress test” to gauge their ability to pay back the loan if mortgage rates were to rise.
The goal of that policy effectively was to make it harder to get insurance, which would help make sure that people buying houses are financially able to do so. Judging by Tuesday’s numbers, that policy seems to be having its desired effect, as the CMHC said the new regulations were the biggest factor in the decline in new insured mortgages.”
Read the full article here.
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