Old news by now thanks to the interwebs, but the 30 year amortization is expected to end, when we're not sure yet, but the announcement will come tomorrow.
As LeoS correctly pointed out in comments on the prior post, this means:
- payments will rise 12.5%
- max qualifications will drop by 9%
- and 40% of the folks who took out mortgages last year would be in different products than they chose
Is this significant? Only time will tell, but I'm guessing it'll be slight, much like previous changes to amortization amounts had little impact on the market.
More concerning should be the signal this sends to the buying public. The Bank of Canada is warning on debt levels to the point of being ignored and so is the finance department. Canadians have shown a remarkable ability to ignore economic sense and continue to spend their way through the most troubling financial times we've seen since the 1930s.