The level of mortgage debt in Canada has sparked furious debate among industry professionals about qualification standards for mortgages.
“If you can’t save five per cent for a down payment, you have no business buying a house,” said Blair J. Anderson, the broker of record for Promise First Realty inToronto. “I don’t want my clients to run into a situation where they have to get rid of the house. It’s not good for the market or for them as individuals.”
Some mortgage brokers, however, disagree.
“I think there are many good, hard-working Canadians with good credit, who make enough money to support a mortgage payment,” Hal Tagg, an Alberta-based broker and real estate agent, wrote on CREW‘s sister site,MortgageBrokerNews.ca.
“I don’t see the problem with helping them borrow the money for a down payment to help them get into their first house. If a private lender is willing to take the risk in lending the down payment money, why not let it happen?”
Tagg, who disagreed that having at least a five per cent down payment should be a requirement for attaining a mortgages, wrote the comment in response to an article about the levels of mortgage debt Canadians have accrued across the country.
According to BuzzBuzzHome, British Columbians have racked up mortgage debt faster than they’ve grown home values. In 2012, the average value of a house rose 83.7 per cent over 13 years, to $535,400 – this being before the market went ape.
The amount of mortgage debt West Coast homeowners took on, however, increased more than 132 per cent over the same period to $241,800, or 45.2 per cent of the value of the home.
Should a five per cent down payment be a requirement for attaining a mortgage?