Canada could also refocus on what the CMHC is and what its role should be.

” CMHC’s mandate evolved to include promoting affordability, choice, and access to housing finance for all Canadians. ” This mandate I suggest has been discarded.

CMHC has been turned into a cash cow for the federal government delivering over $1 billion to the federal government coffers in 2024. CMHC was to allow or offer Canadians access, or a path forwards,, for ALL Canadians to be able to purchase a home. This mandate has been long forgotten. CMHC is necessary for many Canadians today to allow them into the real estate market without the need of 20% down payments, which for almost any new home buyer would be next to impossible. At the same time the cost of this insurance has become prohibitive to those same home owners.
So lets recognize what the CMHC fee is…A tax on Home Buyers with an explanation that makes it palatable to the public.
Underwriting is indeed needed. But should those policy’s be more onerous then the underwriting policy’s that the banks themselves have implemented? CMHC was established to facilitate and represent Canadian’s interests and betterment.
Insurance fee’s too are prohibitive. Yes, the federal government is guaranteeing these mortgages ultimately. And yes, protecting Canadians interests against a sudden upturn in defaults that those very Canadians ultimately would have to pay is important. At the same time, CMHC has become a for profit entity for the government, that the government itself gets to regulate thus insuring that CMHC will continue to be needed, and will continue to offer a huge income for the federal government. We know the reserves that CMHC always had, We know the additional and un-needed additional funds imposed by the federal government largely through OSFI. At the same time, Should the worst happen, and the federal government (and Canadian’s) find itself responsible for a huge increase in defaults, we all know that policies can be re-written allowing people time to re-establish themselves. Only a massive shock to the system could endanger that many properties and the mortgage market in particular. This crisis could often, as we have witnessed so many times, is often made worse by the very action’s of the government and its various departments (CMHC, OFSI, lack of leadership from our so called elected leaders who keep accepting a salary from Canadians)
Lord knows the USA induced financial crisis of 2008-2009 which started in the housing sector and spread around the world could have easily been dealt with to reduce the strain on institutions. But a few at the levers of power had huge opportunities to make billions in allowing the housing sector to crash the economy.

The answer to the housing affordability crisis is not to subject Canadian homeowners to Billions in losses. Let us make the CMHC work for Canadians once again.
I might ask, who decided that mortgages HAD to be paid off in 25 years? Are there not better solutions? We know there are better answers, but Ottawa refuses to allow Canadians to utilize these solutions.
Rules that the CMHC has established, or has to enforce for for other regulators, can be huge obstacles to home buyers.
-Down payment regulations can costs Canadians 10’s of 1000’s of dollars before they can even think about purchasing. If you want housing to be affordable, lets make it more affordable to purchase, not add onto the costs.
– OFSI imposed the “qualifying rate” upon Canadians. support or hate the qualifying rate, it is an artificial number and HAS reduced Canadians buying power by what? 18% – 20% ? Want to make housing affordable, do not impose a solution were Canadian home owners have to suffer a loss.
Stop reducing Canadian affordability. Worried about the cost of rate increases? 1st time home buyers can be protected by enforcing a policy of the need to take a 5 year fixed term as the 1st term of their mortgage. That ensures stability for those 5 years. In 5 years, earning should have increased. Or CMHC could step in and ensure that lenders cannot offer a renewal that is unreasonable and could lead to foreclosure. Or offer insurance that helps Canadians afford a huge increase in mortgage payments. I think most people would welcome a $100 a month insurance fee that stops the mortgage renewal from doubling their mortgage payment.

I have scraped the surface here. Even offered overly simplified solutions. BUT I was trying to show there are solutions to housing affordability that do not necessitate Canadians losing $ billions in home equity, or in real world language…people’s wealth. To follow that path will lead to extraordinary damage to all Canadian’s.