Review of Mortgage Changes in 2016

03.01.2017

One of our resident mortgage brokers, Eitan Pinsky, has offered a quick and handy review of the changes made to mortgages and financing (both provincially and federally) in Vancouver in 2016.

Mortgage Rules have become more convoluted than ever, contact Eitan and his team to talk about your options: PinskyMortgages.ca or [email protected].

Take it away Eitan..

BC’s Interest Free Mortgage Loans and Other Mortgage Changes in 2016

On December 15, 2016, the British Columbia government announced the BC Home Owner and Equity Partnership (BC HOME Partnership) to help 1st time home buyers by providing interest free loans to help with down payments.

The Goal (as per the Province) is to provide a repayable down payment assistance loans to 1st time home buyers. Basically, the BC Liberals want to increase affordability.

In my lengthy blog article about the new Interest Free Down Payment Loans for First Time Home Buyers, I go over the the program’s finer points. My concluding thoughts are below:

  1. The program will have almost no impact on home buyers’ affordability. 
  2. Home prices will not be pushed!
  3. There was no consultation. Even today, a full two weeks after the announcement, not one lender has verified they will allow this program.

To make a long story short, I applaud the government for trying… Affordability for first time home buyers (and 2nd time home buyers, for that matter) is a big issue. I believe too little has been done on the supply side – so far, most of the programs have been demand side changes. Demand side changes decrease affordability. In 2016 alone, these changes have been:

  1. Stress Test and Decreased Affordability 
  2. Bulk Insurance Changes: Complexification of Mortgage Rates
  3. Increased property transfer tax for foreigners
  4. Vancouver Empty Homes Tax
  5. Capital Gains Exemption Loophole Closed

On the supply side, however, we have had some, but very limited movement:

  • Vancouver Laneway Homes: 2,500 new laneway homes have now been approved.
  • Cambie Street Corridor has been rezoned and is being developed
  • Oakridge Centre (when will this happen?), The River District, and much more…

More needs to be done…

Want to check out your affordability? I’ve built a handy affordability/qualification calculator

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