With low mortgages rates pushing up housing prices, Finance Minister Jim Flaherty’s recent public comments have sparked a debate about whether or not the government should step in to keep the housing boom from becoming a housing bubble. As has been done in the past, the mortgage requirements – notably down payment size and amortization period – needed to secure a high-ratio mortgage would be tightened.
Meanwhile, Joe Santos, President of the Mortgage Brokers of British Columbia, thinks that the market is going to self-correct, partially because housing prices have escalated to the point of no longer being affordable. Santos strongly feels that tightening the mortgage requirements would be more damaging than helpful and would create an unnecessary depression in the market.
