According to the Globe and Mail, CTV is set to report the federal government is considering raising the minimum down payment for homebuyers and reducing the amortization period due to fears in the capital consumers are taking on too much debt.
In an interview with CTV Question Period set to air next week, Finance Minister Jim Flaherty says the changes are being considered for those consumers “who are taking on obligations that they will not be able to handle in the future when the interest rates do rise.”
While he doesn’t specify what the specific changes will be he indicates the size of the downpayment will be a “higher figure” than its current five per cent and the amortization period to “something less” than the current 35 years.
Instead of meddling with the minimum downpayment, Ottawa should consider ways of making homeownership more affordable by making the interest paid tax deductible. Flaherty has previously said they wouldn’t do this because Canadians already enjoy tax savings on their principle residence as the gains on the sale are tax free.
Alternately they should give incentives to cities to privatize services like garbage collection in order to help reduce property taxes.
Both measures would make homeownership more affordable instead of making it harder for first-time homebuyers to purchase a home.
