Bank of Canada Governor Stephen Poloz is calling for more options when it comes to the home mortgages that are available to Canadians.
In a speech Monday that was delivered in Winnipeg, Governor Poloz said changes he’d like to see include encouraging loan terms longer than five years, the creation of a market for private mortgage-based securities, and the launch of shared-equity mortgages for first-time home
buyers. The central bank governor added that greater innovation would boost flexibility for borrowers, lenders and investors, while lowering risks to Canada’s financial system.
“To be clear, the system is not broken — it has served Canadians and financial institutions well,” he said during a speech to the Winnipeg Chamber of Commerce.
“But we should not stop looking for improvements and I invite all of you to join this effort.”
Looking forward, Poloz said he expects the Canadian housing sector to start growing again later this year as the Vancouver and Toronto markets stabilize. He said fundamentals such as population growth and job creation remain "really strong" and expects they've "put a
floor" under the adjustment process. Still-low interest rates remain attractive to people looking to enter the housing market, he added.
Poloz also said that he supports the tougher mortgage guidelines instituted by the federal government in Ottawa, which brought in interest-rate stress tests. He said the more stringent guidelines have helped improve the quality of loans and put a stop to speculative increases in house prices in Vancouver and Toronto.
