Andrew Scheer promises scrapping of mortgage stress test in boost for Canadian realty

Andrew Scheer, the Conservative Leader, announced that a plan was in place to make homes cheaper and more affordable for Canadians. This plan would be set into motion by loosening some of the rules which were implemented by the former Conservative government during the global financial crisis. He reiterated that he would allow first time home buyers to get 30 years mortgage plans so that monthly payments are lowered. For millions of Canadians, buying a home is the biggest investment and Andrew wants to make sure that Canadians have access to affordable homes.

In 2008, the Harper Conservatives had began reducing the maximum mortgage amortization rate for insured mortgages and they initiated it by knocking it down from 40 to 35 years and in 2011 it went down to 30 years. Then, Jim Flaherty, the Conservative Financial Minister further reduced the period to 25 years in 2012 and was of the opinion that while the monthly payments were higher, it would result in lower interest and the mortgages would be paid off faster.

The timing of the announcement

The announcement had come at a time when growing debt was sitting heavily on the shoulders of the Canadians and the financial markets were locked up in the late 2000s. Mortgages that owners were not able to pay for or properties that were valued less than the loans taken against them, created a severe problem. When asked why the Conservative government was now going back on their own rules, Scheer replied that longer mortgages would allow more people to buy homes and stressed it was important to have strong regulations around the financial sector.

It is seen that the median mortgage debt of Canadian families has doubled between 1999 and 2016 and risen from $91, 900 to $ 189,000 in 2016. Scheer has also agreed to ease the stress test on mortgages and remove it completely from mortgage renewals. The test would make sure that people who were taking mortgages would be able to pay them off in time. Scheer also opined that the Conservative government would make surplus federal real estate available for development for increasing housing supply and would also launch inquiries into money laundering practices in the real estate sector.

He continued that PM Justin Trudeau had put the dream of home ownership out of the reach for so many young Canadians and that when he became Prime Minister; he would fix the bad policies and work towards lowering the prices of homes on the market. Scheer had been campaigning in the Toronto area suburb of Vaughan and will then move to St. Catherin’s in Ontario. He said that he was not concerned with polling and believes that the Conservatives and Liberals had equal opportunities despite some recent controversies. Campaigns are now held in places where people had written them off and he was confident to winning those seats.