Caroline Rogers, an official at the Bank of Canada, issued a warning against manipulating mortgage rules in an attempt to make housing more affordable.

In her statements, Rogers warned that significant changes to mortgage policies could lead to unintended consequences that might negatively impact the stability of the financial market.

Although the proposed adjustments aim to facilitate more Canadians' entry into the housing market, Rogers emphasized that short-term solutions could create long-term challenges, especially as the ongoing rise in interest rates and inflation may make it harder for many individuals, especially young people, to afford housing costs.

On another note, Rogers discussed the recent increase in the mortgage consumption period from 25 to 30 years, which aims to reduce monthly payments, but she confirmed that it could significantly increase the total interest costs on loans.

Summary of Caroline Rogers' statements on the mortgage market in Canada:

1. Warning against amending mortgage rules:

• Caroline Rogers warned against excessively amending mortgage rules as a means to improve access to homeownership.

• She explained that significant changes could lead to unintended effects that negatively impact the stability of the financial market.

2. Balancing supply and demand:

• Rogers emphasized the importance of achieving a balance between supply and demand in the housing market, and confirmed that this balance takes time.

• She warned that short-term measures to reduce financing costs could have negative long-term effects.

3. Increase in consumption period:

• The federal government announced an increase in the maximum consumption period from 25 to 30 years for first-time home buyers and new home purchasers.

• The aim of this measure is to facilitate more people's entry into the housing market.

4. Financial costs for borrowers:

• Rogers explained that extending the consumption period to 30 years reduces monthly payments by about $200, but it increases total interest costs by about $50,000 over the life of the loan.

5. Concerns about young people's ability to enter the market:

• The government's decision came in response to concerns about the difficulty young people face in entering the housing market amid rising prices.

• She confirmed that the ability to afford housing remains an important issue for Canadians following the rise in inflation rates and interest rates.

6. Mortgage renewals and risks:

• Rogers acknowledged that mortgage renewals could lead families to cut back on spending or increase delinquencies.

• However, she confirmed that the Bank of Canada expects households to continue adjusting their saving and spending patterns to cope with rising payments.