The Canadian Real Estate Association chief economist, Gregory Klump, agrees that the Canadian government is trying to get consumers to take a second look at the reality of getting a mortgage. This is especially true for first-time home buyers that tend to apply for mortgages with a high ratio. A high ratio mortgage is one with a down payment that is lower than 20%. With this type of mortgage the borrower must take out default insurance according to federal law.
As a result, Canadian consumers are getting more informed and doing more research about home purchases than they ever have been before. First-time buyers are taking the time to ask questions and read through information, especially on the Internet, about the responsibilities and implications that go along with a mortgage and home ownership.
Is this is a good thing? While many people think that the government is just stepping on toes again and putting in provisions that are limiting homebuyers from stepping into the real estate world, others take a look at what has happened in the United States lately and know that Ottawa is merely trying to protect Canadian real estate the best means it knows how. 1