Association lobbies for mortgage rule change

Association lobbies for mortgage rule change

Association lobbies for mortgage rule change Brokers may have just found their campaign issue, with an industry association calling for something that could bring thousands more buyers into the market

The CMBA is advocating for 30-year amortizations for first-time homebuyers in the wake of a Conservative Party proposal to increase RRSP withdrawal limits.

“The Canadian Mortgage Brokers Association urges the implementation of policies to make housing more affordable, in particular, by increasing the amortization for first time high ratio insured home buyers to 30 years from the current 25 years,” CMBA wrote in a release. “This would decrease their monthly mortgage payments and allow them to keep their RRSP intact so it can be invested for growth and make retirement planning more effective for these buyers.”

CMBA argues the existing one million dollar cap on insured mortgages will ensure any impact the change might have would be negligible to the housing market.

And brokers are supporting the suggestion.

“Most Canadians consider home ownership a good thing and that buying a home is good for their financial health,” Geoff Lander of TMG The Mortgage Group told MortgageBrokerNews.ca. “If (the regulators) have agreed to allow 30-year amortizations for certain borrowers, I don’t see why they wouldn’t allow them to help younger people get into the market.”

Those younger potential homebuyers would surely welcome any change that makes it easier for them to purchase a home. Especially considering 91 per cent of Millenials consider owning a home is an important life milestone, according to recent RateSupermarket data.

Further, 79 per cent of those people polled believe Canadian real estate is a safe investment.

That study also found that Gen-Y ers struggle with affordability: 46 per cent say they can’t currently afford to purchase a house in their region.

CMBA’s suggestion was spurred by a Conservative Party proposal to increase RRSP limits to $35,000 from $25,000. The association argues the increased the amount of RRSP funds would not lower borrowing costs due to the fact that they would still have to be paid back within 15 years.

“The increase in RRSP withdrawal limits for first time home buyers will therefore be of limited benefit to many buyers, such as younger buyers and new university graduates, and may favour the more well-heeled or mature first time buyer,” CMBA wrote.
19 Comments
  • Waste of Time 2015-08-14 9:48:23 AM
    Sorry but no one in Ottawa listens to the CMBA, let alone knows who they are. That is not an insult, just a fact.

    Having two national associations, including one with no budget, is a complete waste. The crosstalk from CMBA makes brokers look like we're not on the same page and damages our industry's credibility. Ottawa sees them as just one more insignificant lobby group. We need one unified association, and we need it NOW.
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  • Rick 2015-08-14 10:00:38 AM
    Agreed this will fall on deaf ears CMBA has 0 weight in Ottawa.
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  • Samantha Gale 2015-08-14 10:20:42 AM
    CMBA is on a roll. We have been working hard to support mortgage brokers and the mortgage borrowing public. We have been talking to all four political parties about housing affordability solutions. We have been on Global TV and in the Vancouver Sun. This is a perfect time to get our message out!!
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