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Tucked into the Liberals' Fall Economic Statement was a nugget about promoting long-term mortgages in Canada. Specifically, the Liberals said they plan to launch "consultations on the market development of long-term mortgages in Canada" (assuming their government lasts long enough to do it).

This initiative is nothing groundbreaking. Policy architects have entertained the idea of improving long-term mortgage options for years. It keeps coming up for two reasons:

In a win for lenders and consumers alike, the government is amending the mortgage insurance rules to eliminate its mortgage stress test on low-ratio (a.k.a. "bulk insured") mortgages that switch from a federally regulated lender to any other lender at renewal.

The move, which is effective today, December 16, lets insurable borrowers with higher #GDS#/#TDS# ratios play the field at renewal. These low-ratio mortgagors can now switch to the most competitive lenders and qualify at the contract rate instead of their contract rate plus 200 bps (or 5.25%, whichever is higher).

The change is significant for renewing borrowers who were trapped by the stress test. The reason is, the insurable rates they'll now have access to are often better than:

(A) uninsured rates (especially on lower LTV loans), and
(B) low-ratio renewal offers.

That said, lenders we speak to don't expect tremendous uptake, given high customer retention rates and increasingly competitive renewal offers.

The fine print

Forecasting 2025 interest rates is starting to feel like reading tea leaves in a hurricane.

When economic uncertainty reaches these levels, mortgage advisors need time-tested strategies that don't depend as much on economists' dubious fortune-telling abilities—or the market's, for that matter.

One of this author's go-to analytical frameworks is a mortgage planning acronym I coined in the BlackBerry era 14 years ago. It's called I.D.E.A.S., and it's just as applicable for term selection today.

For a while there, it seemed about as likely as finding a unicorn in a haystack, but now it's confirmed. Mortgage finance companies (MFCs) can accept uninsured straight switches qualified at the contract rate.

One of the nation's largest MFCs, First National, announced the move on Thursday, reportedly after getting confirmation from its bank funders. MCAP and others are expected to send out similar notifications soon.