CMHC Pulls Plug On Zero Down Mortgage

When I bought my first house in Saskatoon only a few years ago I needed to have 5% as a down payment. This was all fine and dandy in the house market in Saskatoon in 2006 when I had time to “save” for a down payment without worrying about the market going up too much more in 3 months than it took me to save (I am sure I was saving for longer than that though). As a first time home buyer in Saskatoon I was able to use my RRSP’s and put those towards my 5% down. That was very helpful as otherwise I probably wouldn’t have been able to buy a house in Saskatoon. I probably would have taken advantage of the 0% down had it been available at that time.

Our government is trying to ensure that we do not fall into the same avalanche of lending disaster as the US and this is one of the ways they see to attempt to keep our Canadian housing market strong and to risk us going down the same road as the US. One major difference is that, to buy a house in Saskatoon and in Canada in general, we have to have more than a mere pulse. In the US anyone with a pulse was getting a mortgage. I see it with car sales, if you have a beating heart you can get a car, but it is not that easy for buying a home in Saskatoon.

I don’t disagree that the government has to be prudent so that we don’t find ourselves in trouble, but I don’t agree that we are in the same situation as the US. What I do think though is that first time home buyers in Saskatoon sometimes have their sights set very high. Instead of getting a ‘starter house’ in Saskatoon or a ‘starter condo’ in Saskatoon, many first time home buyers in Saskatoon want to jump into their dream home the first crack at it. I do know of several people who would rather continue to rent something that is deemed ‘nicer’ instead of buying something a bit smaller and owning it. Some of what we are experiencing with people overextending actually comes from not wanting to live within your means. So, maybe instead of pulling the pin on Zero down, the lenders should be helping people determine what they can afford comfortably and why it may be of benefit to start smaller and work your way up when buying a house in Saskatoon.

Just my opinion though as I was one of the lucky ones who bought when our Saskatoon real estate market was still slow and cheap.

For additional information on this story or any other questions about the Saskatoon real estate market feel free to contact me!

Kari Calder
Saskatoon Real Estate Agent
Century 21 Conexus Realty Ltd.

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