Association lobbies for mortgage rule change

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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.
  • Waste of Time on 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.

  • Rick on 2015-08-14 10:00:38 AM

    Agreed this will fall on deaf ears CMBA has 0 weight in Ottawa.

  • Samantha Gale on 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!!

  • Henry on 2015-08-14 10:22:22 AM

    What are you talking about.
    In Toronto the housing bubble is getting bigger and bigger in spite of tightening the rules.
    Imagine if they lose the rules.

  • Morris on 2015-08-14 10:59:46 AM

    Re Waste of Time - Your comment sounds like a great reason for the other association to step aside. Its best before date has long passed. That aside, CMBA's comments make sense.

  • Morris on 2015-08-14 11:04:30 AM

    Waste of Time - History hasn't shown the other association to have Ottawa's ear. To eliminate any unwanted crosstalk (assuming that's a real issue), one of the associations would need to step aside. CMBA's ideas are worthy of consideration, the other association's best before date has come and long gone.

  • okay on 2015-08-14 11:22:29 AM

    150 years amort would certainly be a better alternative for continued ponzi scheme. Idiots! I will do everything in my power to save my kids from joining this scam.

  • Joseph on 2015-08-14 11:32:39 AM

    Your comments sound (if one buys into them) like a great argument for one of the associations to step aside. Without insulting and just stating a fact, it might be best for the one whose "best before" has long passed to step away.

    CMBA's analysis of the point is welcomed, well considered, on point, and constructive; particularly in comparison to the otherwise silent voice left on the part of mortgage brokers.

    This is not surprising as they speak for mortgage brokers only and are not a failed attempt to be everything to everybody in the mortgage world.

    Well done CMBA! I enjoyed the live media coverage as well.

  • Grow up on 2015-08-14 11:33:05 AM

    Comments like that just go to show the lack of professionalism that some people have in this industry.

  • JSydneyH on 2015-08-14 11:53:18 AM

    While CMBA has a great idea with respect to the 30 year amortization for first time buyers, I think it is now time to ask the government to recognize the larger urban centres are a separate market from the rest of the country and rules designed for one negatively impact on the other. Regional rules are long overdue.

    I do not really care which association presents the idea just so long as either does.

  • Concerned Member on 2015-08-14 12:21:51 PM


    I must say, I've been following this since I received the email stating MBABC and CMBA's position on this proposed change, which would most likely only come into affect if the Conservatives were to remain in power.

    First off, I must say I'm disappointed to see an association take a hard nosed view point on a policy that would improve the availability of capital for First Time Home Buyers. Second, proposing a 30yr amortization for high ratio mortgages is completely out of touch with the regulatory landscape we've been living in. There is concern about over heated markets and people borrowing more than they can afford because of record low interest rates yet what is being suggested is that people with the least amount of skin in the game should be able to have a 30yr mortgage? I can only imagine the reaction of our regulator for such a nonsensical suggestion. Above all the argument made states that it is for affordability of home ownership and that using ones RRSP funds is a negative....

  • Concerned Member on 2015-08-14 12:56:22 PM


    I must say, I've been following this since I received the email stating MBABC and CMBA's position on this proposed change, which would most likely only come into affect if the Conservatives were to remain in power.

    First off, I must say I'm disappointed to see an association take a hard nosed view point on a policy that would improve the availability of capital for First Time Home Buyers. Second, proposing a 30yr amortization for high ratio mortgages is completely out of touch with the regulatory landscape we've been living in. There is concern about over heated markets and people borrowing more than they can afford because of record low interest rates yet what is being suggested is that people with the least amount of skin in the game should be able to have a 30yr mortgage? I can only imagine the reaction of our regulator for such a nonsensical suggestion. Above all the argument made states that it is for affordability of home ownership and that using ones RRSP funds is a negative. What the argument forgets to mention is the tax break one receives for contributing to your RRSP account in turn helps increase ones savings rate. Yes, there are a number of people who won't be able to save the $35k per person or $70k per couple, but the down payment is still the single biggest barrier to entry for first time home buyers, not the monthly payment. And speaking on the subject of impacting retirement, stats actually show that a large portion of Canadians retirement savings come from equity appreciation in their principal residence not RRSP contributions.

    If the argument was to help increase First Time Home Buyers, then the focus should've been on assisting them with a down payment ie. Zero down mortgages or borrowed funds for down payment or incentives for parents to gift their children a down payment. That said, I by no means believe that decreasing the down payment requirement is appropriate solution because zero down in a hot market could have negative for first time home buyers if the market turns. However in markets like Toronto and Vancouver, the 20% requirement for homes worth more than $1M is a bit onerous, so in that case some adjustment might be palatable.

    However, I digress.

    While I applaud any and all efforts to help our industry and improve the affordability for First Time Home Buyers, I would prefer our associations applaud steps governments make to improve the landscape and put forward suggestions that will actually resonate with the regulators. It will give more credibility to our industry if we can demonstrate that we understand the government's and regulator's concerns while still working to improve the lending landscape for first time home buyers and existing home owners.

  • Ralph on 2015-08-14 1:18:38 PM

    Concerned Member - I have some fairly high level economics and public policy education. Your position is based on fairly questionable premises. The logic of your position escapes me. I don't mean to be disrespectful, those are my honest comments.

  • Niki on 2015-08-14 1:49:14 PM

    No matter how much a person may qualilfy to borrow, fact remains, housing is grossly overpriced in relation to disposable income in a least two, if not more, Cities in Canada--in my own opinion. When discussing first time home buyers, it is not their ability to borrow more that makes things better for them. They may be the first generation in Canada to never be able to pay down their mortgages. And worse, after borrowing so much, should the housing market swing against their favour, as it did in the early 80's, they may never own, may never be able to get out of debt, or may never be able to get themselves ready for their own retirements. Making these changes, though it may sound generous, actually could cause far more damage in the long run than the intentions may seem. If things run amoke as they could, the only individuals actually benefitting in this scenario, may be those actually getting out of the housing market and downsizing.

    Although this view may be off, I do recall a day or two a few years ago, where having a million dollar anything looked as rich as cheese cake to the taste buds. One of these days we may yet get to see an entry level bungalow with an extremely small lot, in a not so appealing part of town, selling for 5 million bucks. "May" is the operative word. Although this looks good, the alternative is unacceptable, and seems a lot more like enslaving young people to freedom 55--the new definition, where they might get to retire when their youngest turjns 55 years of age.

  • Concerned Member on 2015-08-14 3:16:49 PM

    Ralph - No offense taken. You are welcome to your opinion.

    My opinion is based on my interaction with many First Time Home Buyers, who are directly impacted by these policies, and at the very least anecdotally, these are my findings. My comments were more focused on the overall tone/direction of the advocacy on this topic than simply whether or not we should extend amortizations, increase down payments or any other policy for that matter.

  • John Bargis on 2015-08-16 9:56:38 PM

    I commend CMBA for the well thought out, and constructive suggestion on how to improve the position of the Canadian first time home buyer.

    CMBA is clearly on the right track, and I'm personally very impressed with it's professional, and experienced broker leadership that has chosen to take the high road when attacked by misfits like "Waste of time" and "Rick" who choose to post useless comments incognito.

    The industry should seriously consider introducing aptitude tests, to filter out cranks who add zero value with their pointless comments....What a disgraceful "Waste of Time" - pun intended!

  • Troy Resvick on 2015-08-17 3:32:05 PM

    First off, I appreciate the time and thought given in ‘some’ of previous posts, however, hiding behind a pseudonym is weak. By all means, please step up, voice your opinions and/or concerns, but be accountable for and respectful with your comments. I’m down for good, healthy debate…however, as Mr. Bargis wisely states, it needs to be value-added. To criticize without correcting is a Waste of Time…
    I for one have a deep appreciation and respect for the efforts of the many committed volunteers and staff involved with both associations and am proud to be a founding member of both.
    Thinking that only one organization can have a relevant/official voice is short-sighted, self-serving and frankly undemocratic... I do not believe this is done with the best interests of Canadian Mortgage Brokers, but rather, with a mindset of protectionism. Find me an industry, as important to the Canadian economy as the mortgage industry, where only one participant speaks on behalf of everyone with 100% agreement?
    Different view-points and methodologies should be welcomed and encouraged, so long as the common objectives and goals of promoting the value of Canadian Mortgage Brokers to home buyers & owners, remains the focus, while further advancing their education & professionalism. To this end, the Canadian Mortgage Broker and Mortgage Consumer both benefit.
    As for the topic at hand, the 30-year amortization would be a far more effective tool to assist first-time buyers looking to enter the market compared to the increased RRSP withdrawal limits. The issue is one of affordability, not sufficient equity injection.
    Respectfully,

  • Check this one on 2015-08-17 8:00:27 PM

    http://www.nationalobserver.com/2015/08/17/news/why-joe-oliver-seeking-economic-advice-scandal-plagued-corporate-honcho

  • Cinzia Dalgarno on 2015-08-18 5:39:31 PM

    Interesting that an article regarding lobbying for an increase in amortization for first time home buyers should have comments almost entirely focused on the abilities (or lack thereof) of organizations that are in fact working in our best interests, to improve all aspects of mortgage financing as pertains to the mb industry.
    To address the actual topic of this article - I think having a 30yr amm for high ratio mortgages (ftb) makes perfect sense. The restrictions we've seen in the past 6yrs have been insane. We've kept the rates down artificially, restricted lending guidelines so that people can barely qualify based on current rates... what does everyone think is going to happen the minute rates are no longer held down? Am I the only one who has been thinking about this for the past several years? 30yr amm would certainly go a ways towards easing stringent qualification regulations, at least.
    as to the CMBA and CAAMP - let's learn how to play together in the sandbox people. both organizations have merit; anyone stating that CAAMP has zero use in this industry is not someone I (nor anyone else) should take seriously. grow up, stop whining and complaining, put up or shut up - if you're not willing to even sign your NAME for goodness sake, let alone join the fray in making these (either/both) organizations the powerhouse they CAN be, then you're not worth anyones' time. Let's be proactive, let's be supportive, let's have a voice in government, let's be the professionals we are supposed to be. ultimately, enabling us to continue helping consumers obtain the best possible options for their mortgage needs.

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