Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
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Few months ago CMHC proposed new changes to the way how debt service ratios are calculated. The main three sticking points were to include –

1)      Unsecured lines of credit and credit cards

2)      Secured lines of credit and

3)      Heating costs.

CMHC reported – (at that time) that after consulting with the industry – it had decided the effective date for the change to be end of year 2013.

Recently it has again reported that some of the approved lenders (Weren’t they part of the industry?) have told that they are incapable to make such changes in their system within this time frame. So, CMHC has granted them their wish by extending the deadline by no later than end of 2014. CMHC expects them to complete every change by as early as possible in 2014.

Why it takes so long to implement these changes – are unknown at this point. It may point to a systematic weakness within the industry to respond to changes.  It remains to be seen how Canadian industry responds in case of a financial emergency.