The measures announced by Mr. Flaherty will also have an effect on the higher end of the market, because homes at $1-million or more will no longer be eligible for mortgage insurance, meaning the buyer must have a down-payment of at least 20 per cent.
“I think that the luxury home market will be significantly impacted by it,” said Calum Ross, a mortgage planner who works with many buyers in Toronto’s high-end market.
He thinks that’s a good thing. “It’s ridiculous that these people have ever been allowed to get high-ratio mortgage insurance,” he said. Last week, he secured a mortgage approval for more than $1.25-million for a couple that he worries can’t afford the home, a situation he sees often.
“I told them they were taking on too much risk,” he said.
– from ‘Tightened lending for mortgages will cool market – but by how much?’, Globe and Mail, 22 Jun 2012 [hat-tip fatjay]
Of course, in Vancouver, ‘luxury’ is your average SFH.
We anticipate the mortgage tightening rules will affect the market at all price levels.