Saturday, May 31, 2025

Latest

Justin Trudeau Tightens Mortgage Rules After BoC Warns of Housing Risks

Canada’s federal government has decided to intervene in the country’s red-hot housing market, shortly after the Bank of Canada warned of imminent household debt risks amid surging real estate prices.

On Thursday afternoon, Prime Minister Justin Trudeau raised the benchmark interest rate that sets the criteria for whether or not potential homebuyers qualify for an insured mortgage via Canada’s housing agency. The latest move coincides with an earlier April decision by the country’s banking regulator to also set a new rate for uninsured mortgages.

The rule change— set by the Office of the Superintendent of Financial Institutions— is expected to come into effect beginning June 1. The latest step is in response to a Thursday morning warning from the Bank of Canada, cautioning Canadians to not expect historically low interest rates to remain in place for the long-run, nor expect the sharp escalation in housing prices to continue.

Canada’s housing market has been surging throughout the pandemic, as historically-low borrowing rates, coupled with work-from-home flexibility, enticed potential homebuyers to seek more spacious housing. This sharp increase in demand has forced housing prices to jump to record-highs, creating concerns that some Canadians may soon be priced out of the market, or taking on too much debt.

With the latest changes, Canadian homebuyers will now have to prove they can afford the minimum interest rate of 5.25%, instead of the current threshold set at 4.79%. According to economists cited by Bloomberg, the latest rate increase is expected to cut back the purchasing power of households by approximately 5%. “It is vitally important that homeownership remain within reach for Canadians,” said Finance Minister Chrystia Freeland in a statement.

The measures from the federal government and the regulator come mere hours after the Bank of Canada published its annual Financial System Review, which showed that households are becoming increasingly over-leveraged amid speculative housing activity. The report highlighted three key housing markets— Toronto, Hamilton, and Montreal— as showing signs of excess “exuberance,” with Ottawa also nearing that threshold.


Information for this briefing was found via the Government of Canada and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One Response

  1. Well let’s do this,!. more people to be unemployed .no chance for first time buyers … .just setting up all home owners for future interest rate. Increases… more home owners to loose their retirement investment. Lets tax the shit out of home owners now on their home investment gains.. what is the matter with all of above.. simple ..government .no idea..
    .o well banks get rich…lots of money for government to blow..end of the day..I still will never be able to buy a home and be subject to even higher rent issues and still work for minimum wage while everything I need to survive around me goes up.

Leave a Reply

Video Articles

How To Profit From $3300 Gold? An Inside Look At A Massive 300,000 Oz Project | Martino De Ciccio

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

Recommended

ESGold Begins Concentration Tests Ahead Of First Production

Sterling Metals Hits 0.21% Copper Over 482.8 Metres In First Drilling At Soo Copper project

Related News

HBC Telegraphs A Shift Into The Commercial Property Business By Stiffing Its Landlords

News broke this past Monday that Canadian department store chain The Hudson’s Bay Company is...

Monday, October 19, 2020, 11:45:00 AM

Stock Prices May Still Be Elevated Given Current Mortgage Rates And Home Prices

Rising mortgage interest rates and worsening home affordability are buffeting home prices and pressuring equity...

Sunday, October 9, 2022, 03:26:00 PM

Toronto Home Prices Soar to New Record as Buyer Competition Heats up

Home prices across the Greater Toronto Area were sent skyrocketing once again, as lack of...

Saturday, November 6, 2021, 10:48:00 AM

China Reportedly Working On Measures To Support Troubled Property Market

China is reportedly working on a fresh package of measures to assist the property market...

Sunday, June 4, 2023, 07:23:00 AM

‘Build Canada Homes’: A “Federal Developer” Is Framing The Incoming Elections Talk

A growing push to establish a national developer has emerged as a defining issue in...

Tuesday, April 1, 2025, 12:03:00 PM