Federal mortgage charter: “That doesn’t solve the problem!”

The easing measures for mortgage loans, including the famous “mortgage charter”, announced during this fall’s economic statement are only a dip in the water, according to mortgage broker Stéphane Bruyère.

“That doesn’t solve the problem!” he said in an interview with LCN.

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For the broker who works at Les Architectes Hypothécaires, this action taken by the federal government simply risks encouraging banks to postpone the amortization of their clients.

“Instead of you having perhaps 16 years left to repay your mortgage loan, we will do this to you over 26 years or 46 years,” maintains Stéphane Bruyère.

“The only question I think about is: how are my children going to buy? How can someone get into the real estate market if there is no delinquency,” he adds.

The mortgage broker rather criticizes Quebec and the municipalities for their lack of flexibility.

According to Mr. Bruyère, it would be interesting to follow the example of Vancouver, which has recently facilitated the creation of housing.

“If you have a single-family home, you don’t even need to apply for a permit. You can make a triplex or quadruplex. We facilitate [la possibilité] to build. This is not the case here currently,” he explains.

Fixed or variable rate?

Finally, Stéphane Bruyère indicated that he currently finds that it is wiser to opt for a variable rate than a fixed rate.

“I really like the variable rate, mainly for mortgage penalties, especially since I think interest rates will fall over the next few months and years,” says the mortgage broker.

However, the latter recognizes that there are disadvantages on both sides. In the short term, the variable rate could be higher, but the fixed rate is not without risks, proclaims Stéphane Bruyère.

“If interest rates do indeed start to decrease, what will the mortgage penalties be? Don’t be surprised if you have penalties of $10,000, $12,000 or $15,000 when you want to renegotiate your mortgage,” he emphasizes.

To see the full interview, watch the video above.