Quote:
Originally Posted by Weitz
I think it's great rule change. Protects stupid people from hurting them selves. If anything it will hurt the banks because people won't be getting as large mortgages. And anything that brings down the ridiculous prices, especially here in Calgary, is a good thing.
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Interesting take. Historically a lot of "stupid people", have made a pile of money owning real estate. I might argue that the stupid are not those with 20% down and more. I'm not sure we need to start excluding those people now. They are not at the extreme of the markets and ultimately they pose no risk to CMHC and little risk to banks. I'd argue restricting refinancing if anything and keeping the LTV you started with might make some sense.
And banks are still able to grow business simply by keeping their existing clients. They won't have to fight for the lowest rate anymore because those who can qualify must do so at a higher rate. Those business creating artificial low rates will no longer be necessary because they have no bearing on qualifying for new money.
I think it harms people who already own as well as people who are looking to get into the market. I like the changes to date but not this one.