Ottawa
is considering raising the minimum down payment for home buyers as well as
reducing the amortization period in order to stop some consumers from taking on
too much debt.
In an interview with CTV Question Period, to be aired next
week, Finance Minister Jim Flaherty says the measures will be taken if there's
evidence of excessive demand in the housing market.
Flaherty says the new measures would target consumer “who
are taking on obligations that they will not be able to handle in the future
when the interest rates do rise.”
Investor Education:
* Should I buy a
home now, or wait and save more money?
* Understanding
house prices
* Is it better to
buy a home, or choose some other investment? Charlie's story
* What makes
buying a home different from other investments?
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renovations that add value to my home?
He says the likely measures the government will take is to
increase the size of the down payment from 5 per cent “to a higher figure” and
to reduce the amortization period “from a maximum of 35 years to something
less.”
Those measures would increase the monthly payments, making
it more difficult for some people to take on a mortgage and purchase a home,
without having to increase the interest rate.
Last week, the central bank warned that when interest rates
rise to normal levels, up to 10 per cent of households could face difficulties
in meeting monthly payment requirements.
