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Canada Plans To Foster Its Real Estate Bubble By Raising The Maximum Mortgage Size

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Canada plans to increase credit access for the country’s riskiest borrowers in the years to come. A re-elected government may not seem like change, but they promised a big one — larger insured mortgages. High-ratio borrowers will see an increase of up to 25% of their maximum mortgage size. Expansion of credit during a low inventory market is one of the fastest ways to increase prices. It was one of the primary drivers of growth during the US real estate bubble, prior to the Great Recession. It’s an odd policy to embrace, and likely to push prices higher, or at least prevent them from falling.

Canadian Insured Mortgages To See The Max Increase By 25%

Canada is planning to increase the maximum that can be borrowed on a high ratio mortgage. High ratio mortgages are those where the buyer puts less than 20% down on the purchase price. Currently, buyers are limited to home prices of less than $1 million. If the proposed changes go through, this will…

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