April 26, 2010 -
New mortgage rules coming into effect this month make it necessary for some home buyers to lock into five year fixed rate mortgages in order to secure the amount they need. Some claim this is forcing them to pay more than they have to. The irony is that the new rules are supposed to protect vulnerable borrowers from over-extending themselves. But locking into a fixed rate for five years will in some cases mean they will be paying a lot more than they would have with a variable rate.
Convincing people to move to fixed rates will also tend to drive interest rates up, according to a report in the Financial Post.
Do consumers benefit from the more restrictive rules? Or is it primarily the banks who benefit?
Resource: Financial Post mortgages, fixed rate mortgages, variable rate mortgages, rule changes