A sold sign sits in front of a house in Toronto on Tuesday July 12, 2022. Real estate observers say a new mortgage code of conduct promised in the federal budget will be handy for Canadians having financial difficulties, but they still feel the economic plan was lacking affordability measures.THE CANADIAN PRESS/Cole Burston
TORONTO – Real estate observers say a new mortgage code of conduct promised in the federal budget will be handy for Canadians facing financial difficulties, but they still feel the economic plan was lacking needed housing affordability measures.
The code of conduct is meant to ensure federally-regulated financial institutions will provide fair and equitable access to mortgage relief measures for people struggling to stay in their homes because of elevated interest rates.
It would protect these people from unnecessary penalties, internal bank fees, or interest charges and allow them to extend amortizations, adjust payment schedules and make lump-sum payments.
Dominion Lending Centres’ chief economist Sherry Cooper says the code of conduct is “good news” for people with variable rate mortgages because their financial burdens will be “markedly lower” if banks can extend the repayment timeline when borrowers renew, for example extending a 25-year amortization period to a 30-year one.
However, Cooper felt the overall budget offered “not much for affordable housing” and mostly featured “a laundry list of measures” the federal government has previously taken.
Toronto real estate broker Cailey Heaps agreed the mortgage code of conduct will be helpful but took issue with the budget’s lack of support for housing supply.
She says the federal government isn’t meaningfully investing in rentals, so if corporate investors can help by creating more housing, the country should “lean in.”
This report by The Canadian Press was first published March 29, 2023.
