Included in the fall fiscal update are plans to create a Canadian Mortgage Charter, which the federal government says will “support more Canadians through the temporary financial stress caused by elevated interest rates.”

After several consecutive interest rate hikes, the Bank of Canada has held its rate steady at five per cent since this summer. Inflation, meanwhile, is likely to stay above the two per cent target into the new year, according to the central bank governor, as more Canadians’ mortgages are set to come up for renewal.

In an effort to respond to this, Freeland has unveiled a new “Canadian Mortgage Charter,” laying out how financial institutions should “provide tailored relief and ensure payments are reasonable for borrowers.”

The program is set to include measures to:

*) Allow “temporary extensions of the amortization period for mortgage holders at risk;

*) Waive fees and costs that would have otherwise been charged for relief measures;

*) Not require insured mortgage holders to requalify under the insured minimum qualifying rate when switching lenders at mortgage renewal;

*) Contact homeowners four to six months in advance of their mortgage renewal to inform them of their renewal options;

*) Give homeowners at risk the ability to make lump sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties; and,

*) Not charge interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.”




TRYING TO FIND A PLACE TO RENT?

The Canada Mortgage and Housing Corporation has been warning there needs to be at least 3.5 million more homes built by 2030 to improve affordability.

While the Liberals have indicated the need to build more housing is among the most urgent of issues, many of the fall economic update’s new spending announcements will not come into effect in the immediate future.

Some of those include:

*) $15 billion in new loan funding, starting in 2025-26, for the Apartment Construction Loan Program, to support more than 30,000 new homes. This is an expansion of the program formerly known as the Rental Construction Financing Initiative, which will now see more than 101,000 new homes supported by 2031-32, according to the federal government;

*) $1 billion over three years, starting in 2025-26, for the Affordable Housing Fund, for more than 7,000 new non-profit, co-op, and public housing by 2028;

*) The fall economic statement also announces plans to remove the GST on new rental housing for some eligible co-operative housing. This was an initiative spurred on by the NDP in exchange for its support in passing Bill C-56, the “Affordable Housing and Groceries Act.”

*) The fall economic statement also includes measures to crack down on short-term rental properties, such as AirBnB and VRBO, in an attempt to free up those spaces for longer-term residence.

There are plans to:

- Deny income tax deductions for certain expenses incurred related to short-term rental income and for short-term rental operators who fail to comply with provincial or municipal rules;

- Support municipalities implementing their own rules to crack down on short-term rentals, including earmarking $50 million over three years to support municipal regulations enforcement.



Read more:
https://www.ctvnews.ca/politics/how-freeland-s-fiscal-update-impacts-you-1.6654559