This is the first of a two-part series and is one of the most important messages we have written to date.
Regulations governing mortgage (tightening) lending rules have already had a major impact on qualifying for a mortgage in the high ratio insured sector, that is, making it more difficult. But they are not done, not by a longshot. The changes cover both purchases and refinances.
Buckle your seat belts folks. The government is proposing to further TIGHTEN ALL MORTGAGES by including conventional low ratio uninsured mortgages which means the entire mortgage market.
The proposal will require Canadians with more than 20% equity in their homes to qualify at 4.84% versus current contract rates. In other words, instead of qualifying today based on 2.84%, you will have to qualify at a rate some 70.4% higher.
Why is this happening now when the real estate market has cooled, employment levels are high, inflation is very low and when mortgage defaults are not even on the radar screen? Everything is now more in balance, previous tightening has worked and there is no reason to go further.
This chart illustrates today’s status quo relative to a current mortgage qualification and what it would look like post further tightening.

The proposed changes can and likely will (as in past) be issued without advance notice and at any time and will hurt everyone, especially those on fixed and single incomes and for whom it is already more difficult.
The government is attacking the wrong kind of (good) low interest debt and is in fact forcing Canadians to take high interest options such as lines of credit, credit cards and consumer loans all of which put people (in harms way) and on the proverbial ‘slippery slope’.
Does any of this make any sense to you? Us neither. So there is something or somebody else behind this, right? We think so, and the only other possibility (culprit) is the big banks who wield tremendous power with the ability to influence government and regulatory bodies, bodies by the way that were (past tense) intended to protect the consumer.
What happened to the uproar several months back about unfair and predatory bank business practices that was so widely reported by the media? Somehow, someway bank scandals always seems to disappear quietly into the night don’t they?
Moreover, speaking of bank dominance, how did they get away (virtually unnoticed) with recrafting a basic traditional mortgage into a ‘Collateral’ mortgage which secures everything a customer has with the bank, gives the bank the right to increase rates on all instruments at its’ sole discretion, as well as substantial control over your financial affairs with them. Worst of all, consumers are not made aware of
any of the potential consequences. Heck, in truth, it is no longer a mortgage at all, it’s a revolving line of credit facility.
Please don’t miss next week’s article with more specifics about who (and how you) will be affected. If you have any (bad) high interest debt, NOW IS THE TIME TO GET RID OF IT before the window of opportunity closes.
We are on your side and our role is to inform, educate, advise and protect you. I would venture to say, no one else comes close! Please speak to your spouse, family and friends and make them aware of what is coming!