Both the Finance Minister and the Prime Minister have mentioned in recent speeches their concerns over mortgage lending practices in Canada. Specifically, they are worried about the minimum down payment required to purchase a home, currently at 5%.

As the world economy improves, or at the very least as governments around the world borrow more money, interest rates are likely to rise. The government is concerned that as rates increase Canadians will lack the equity in their homes to weather the storm.

The current foreclosure rate in Canada is less than one half of one percent, even after one of the worst financial storms in history. Compare this to over 20% in the United States. In other words, our foreclosure rate is basically zero! Whether or not you feel the Canadian Government is worried about nothing, their concerns may lead to legislation making it harder to either refinance or purchase a home.

If you are looking to do either, we would strongly recommend you do so sooner rather than later. All indications are pointing to both higher prices and higher interest rates over the medium to long term. Buying a home is proven historically to be the best investment a Canadian can possibly make. Anyone looking to purchase or refinance a home with minimum down payment should investigate their options right away while rates and requirements are at a low level.