The federal government has announced new measures to regulate publicly backed mortgages but Whistler experts say they'll do little to impact the local market.
Federal Finance Minister Jim Flaherty announced the measures on Feb. 16 and said they're a way of "proactively" adjusting to developments in the housing market and ensuring its long-term stability.
He announced three measures:
• That borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and smaller term;
• Lowering the maximum amount that Canadians can withdraw when refinancing their mortgages. The government is reducing the amount you can withdraw from 95 per cent to 90 per cent of your home's value;
• Requiring a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties - a measure that could target second homeowners.
The measures do not require a vote in the House of Commons; it's in the purview of the Ministry of Finance to implement them on their own.
"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," Flaherty said in the news release. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."
Drew Meredith, a former mayor of Whistler and a realtor with the Whistler Real Estate Company, said the rules are "no big deal."
"They're definitely afraid of this whole sub-prime fiasco," he said. "The whole package is designed to not allow Canadians to get in over their heads. I quite frankly think it's a little big brother and I think what happened with the sub-prime was a totally different set of circumstances."
The sub-prime fiasco was triggered in the United States when people were being lent mortgages that they ultimately couldn't afford to pay back. Homeowners began walking out on houses that were worth less than the mortgage.
Meredith said the measures, particularly the one regulating down payments, wouldn't have much impact on people buying second homes in Whistler because they're already putting more than that down.
"Most Canadians are putting 25 per cent down when they're buying real estate," he said. "So it's not that big a deal. Now you can, if you can qualify, right now you can get a 100 per cent mortgage if you show that you can afford to make the payments.
"So you know to be requiring people to, and then putting 20 per cent down on a non-owner occupied, I believe that's what most lenders would want anyways."
Speaking to the sub-prime fiasco, Meredith said that's an unlikely event in Canada because there are already tighter controls around lending.
"In the United States it's a very competitive business," he said. "In the States, they had what they called liar loans. If you had a heartbeat, you got a loan, there was absolutely no qualification. Canada's never been like that, we've always been very strict with qualifications for loans."
Meanwhile Doug Mildenberger, the owner of Garibaldi Mortgage, also said in an interview that the measures are unlikely to impact the market for second homes in Whistler.
"You have to have a minimum of 20 per cent down, I don't know of anyone that's financed higher than 80 per cent anyway," he said. "So I don't think that affects people buying a second home in Whistler."
