A number of B.c. banks are already taking steps to reduce their mortgage rates and that includes a proposed plan to charge customers more if they can prove they can afford the rate increase.article Read moreThe Bank of British Columbia said it will start charging higher interest rates to borrowers who make more than $200,000, with an initial rate of 4.2 per cent for borrowers with income over $200 million.
That will rise to 5.8 per cent by 2019, with the minimum rate at 7.9 per cent.
The bank also wants to offer lower-cost mortgages, starting at a minimum of $50,000 for new mortgages and up to $200 a month for mortgages up to 20 years.
It also wants all mortgages to be backed by a government bond.
If approved, the change would apply to all banks, including those that were formerly owned by the Crown Corporation of British Colombia, or CBC.
The move is expected to save CBC $5.5 billion, according to the B.ca.com survey.
The changes would also impact the Banc of British Columbias biggest lender, BMO Financial, which has been trying to lure more Canadians with its low interest rates, and it will offer new mortgages at a lower rate, from 4.4 per cent to 3.8 percent.
The Banc has also proposed to change the way it manages its debt, which currently requires a 10 per cent down payment.
The company said it is considering whether it should continue offering mortgage insurance.
The change will be in place starting in 2019.
B.C.’s Financial Consumer Agency, the BMA, and other agencies are now working on rules to protect borrowers from predatory lenders and make it easier for borrowers to get mortgages.
The government has said it hopes the changes will prevent more borrowers from being left out of the housing market.
Banks say the changes won’t affect their ability to provide loans to the government.