Scheer\u2019s remarks were delivered this past Friday<\/a> in Niagara at the Canadian Home Builders\u2019 Association\u2019s National Conference.<\/p>\n\u201cClearly there are some major unintended consequences that this new policy has had,\u201d Scheer continued.<\/p>\n\n
The new rules Scheer was addressing require uninsured-mortgage applicants to qualify at a rate 200 basis points higher than what their federally regulated lender is offering.<\/p>\n
Scheer notes it\u2019s important to make sure credit markets aren\u2019t exposed to risk that leads to major problems. But he also emphasized first-time homebuyers who can keep up with mortgage payments shouldn\u2019t be shut out of the market.<\/p>\n
Under the current stress test rules, existing borrowers looking to switch lenders are required to pass the stress test again, even if they\u2019ve already done so with their current lender.<\/p>\n
\u201cI don\u2019t see the public policy goal that that achieves \u2014 having that provision in \u2014 so that\u2019s something that we\u2019re committed to removing,\u201d says Scheer.<\/p>\n
\u201cThat has the consequence of the bank that you\u2019re with kind of having you over the barrel,\u201d he adds.<\/p>\n
The prime minister hopeful is not alone in this view.<\/p>\n
Earlier this year, Phil Moore, president of the Real Estate Board of Greater Vancouver, recommended the exact change Scheer is now proposing.<\/p>\n
\u201cThey\u2019re held hostage by the first bank,\u201d Moore told Livabl, referring to how having to face the stress test again makes it harder for borrowers to shop around for better rates. \u201cNow, that\u2019s not fair to Canadians.\u201d<\/p>\n
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