Regulators should explore boosting minimum down payment on homes: CMHC
TORONTO — The head of Canada’s federal housing agency says regulators should explore the possibility of raising the minimum down payment required on a home as a way of easing affordability and reducing risk to the financial system.
“Politicians are tempted to help first-time homebuyers enter the market, but low down payments may be part of the problem, adding to affordability pressures and macro-economic vulnerabilities,” said Evan Siddall, president and CEO of Canada Mortgage and Housing Corp.
During a speech at the Bank of England’s offices in London Friday, Siddall said that low minimum down payments fuel housing demand and lead to higher housing costs.
That ultimately ends up hurting the young, first-time homebuyers that such policies were purportedly designed to help, Siddall said.