After a long run of conservative governance the Canadian people have elected a liberal majority headed by the new prime minister, Justin Trudeau. Since they are now in the majority across the government, they will have the power and influence to affect every facet of life in the nation. This includes the mortgage industry. Some experts have weighed in on how the new government will affect the mortgage landscape, here is what they say.
We can expect higher fixed-rates
Liberal politics is normally characterized by high government spending. This is sure to mean a greater supply of government debt and higher long-term yields to come. The increased spending will put pressure on bond markets, and rates are based off of them. We have already begun to see higher fixed-rate mortgage rates. This could mean that now is a good time to get one before the rate gets higher.
New help for first-time buyers
The party under Trudeau has promised more help for first-time buyers. While we aren’t sure exactly what they mean, this sounds promising for those looking to buy for the first time. It could come in the form of more government tax breaks, or it could come by way of higher amortization limits so they don’t have to put down as much money. What remains is that we may see more hesitant buyers starting to get into the game.
Shifting tax burden
The incoming government wants those that make more to pay more, and for the burden of taxes to be shifted off of middle-class earners. While it sounds great in theory, we need to wait and see how it plays out in practice. What this does mean is that many middle-class citizens will now have more money to spend, and this could put a mortgage within reach. It is possible that we will see more mortgages in the coming years.
Every campaign is full of promises, so we will have to wait to see what actually materializes. What we do know is that fiscal policy does have an immense impact on lending and borrowing. This is just how experts believe the new government will affect the mortgage landscape. Whatever the future brings for the lending landscape,Sky Financial will be here to help you with all of your mortgage needs.