As the Federal Government seeks to deal with the level of Canadian debt a logical approach might seem to be to turn their attention on mortgages, but the question is should governments meddle with mortgages?
Many would argue Canadians should have access to housing that meets their needs and housing they can afford. The Office of the Superintendent of Financial Institutions (OSFI) is proposing a stress test for uninsured mortgages. In this case lower-risk borrowers would be required to be approved at a rate two percent higher than the rate offered to them by their lender.
This brings into question whether many Canadians will be shut out of the market. Another scenario to consider is many Canadians may be driven into less suitable housing or enticed to visit sub-prime lenders that are not federally regulated.
The reality is that home ownership is slipping out of reach for many first-time home buyers in the housing markets with a shortage of affordably priced homes. So the logical question should be should governments meddle with mortgages is it means buyers should have to settle for less than they can truly afford?