BoC official warns against playing with mortgage rules to make housing affordable

TORONTO — The Bank of Canada’s senior deputy governor is warning against adjusting mortgage rules to try to make the prospect of home ownership more affordable.

Carolyn Rogers is delivering a speech today on the mortgage market to the Economic Club of Canada in Toronto.

She says improving housing affordability ultimately requires reaching a balance between supply and demand, which will take time.

Rogers says that relying too much on measures that reduce monthly mortgage payments could hurt the financial health of households in the long-term, as well as the mortgage market and economy overall.

The federal government recently announced it would expand the eligibility for 30-year mortgage amortizations for first-time buyers of new builds to include all buyers of new builds.

Rogers says that while taking out a 30-year mortgage reduces monthly payments on the average mortgage by about $200, it increases borrowers’ overall interest costs by $50,000 over the duration of the average loan.

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press