CMHC To Restrict Homebuyer Insurance

Canada Home Mortgage Corporation (CMHC), the government insurer (for that read taxpayer backed insurer) has recently made an announcement which could negatively impact the Toronto Real Estate market. It announced that it is going to cap the number of deals that it insures & is limitiing banks and other mortgage lenders to $350 million worth of new mortgage-backed securities per month.

This move could cause a slower housing market, because it means that banks and other lenders are now responsible for more Toronto home buyer mortgage defaults than before. If banks are not comfortable with that risk, they may rein in lending, hurther the Toronto Real Estate market. This the latest in a series of moves by the Government to slow down the market, which continues to chug along in 2013, as evidenced by Toronto MLS Listings sales. .

While this could slow Toronto neighbourhood sales in the near term, it's likely that the market will continue to grow in the longer term. Other changes that have taken place over the years, including introduction of the Toronto Land Transfer Tax, the tightening of mortgage lending standards & longer mandated amortizations have only resulted in short term impacts, & so the evidence is that this latest move will have a similar result.

Your Toronto Century 21 realtor should be able to advise you on current market conditions, and help put you in touch with a mortgage lender who can get you qualified. Good luck!



Ram Rajendram is a Toronto Real Estate Broker with Century 21 Harvest Realty Ltd. He sells condos and houses throughout the GTA, and assists home and condo buyers with their purchasing needs. He is also a Canadian Chartered Accountant and holds a Bachelors Degree in Economics from the London School of Economics (LSE)

Ram Rajendram

Ram Rajendram

Real Estate Broker
CENTURY 21 Harvest Realty Ltd., Brokerage*
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