North East Mortgages president Terry Kilakos is calling on the federal government to ease some of the stricter mortgage stress test rules imposed on Canadians by the Office of the Superintendent of Financial Institutions (OSFI) in 2017. He recently appeared on Global News to make his case.
Speaking with Global News anchor Elysia Bryan-Banes, Kilakos warned that in an effort to prevent a housing crisis, the federal government has “way overshot their mark,” and ordinary working Canadians with good credit are being denied mortgages.
“I recently had a client who was a teacher earning about $78,000 a year,” Kilakos said, “and just because they had a (new) car payment, all of a sudden because of the new stress test, they no longer qualified. This is someone with a good job, good income… everything is perfect.”
These aren’t isolated incidents and Kilakos explains the phenomenon in recent North East Mortgages blogs:
In addition to new mortgage rules, municipalities are also starved for revenue and that will cost homeowners in the coming years:
Despite a rough couple of years for the industry, Kilakos is optimistic that the federal government could backtrack in 2019.
“I think that there will be an adjustment on the stress test,” he said. “This is an election year so it will be interesting to see how the politicians are going to use this and spin this as a way to get more votes. I do think there are some changes on the horizon but the government actually needs to speak to some real experts out there and see what the impacts are of any changes they’ve made.”