🌊 Floods and mortgages: an increasingly complex duo in Canada

With climate change intensifying extreme weather events, floods are becoming a worrying reality for many homeowners. And this has direct repercussions on access to mortgage financing.

🏠 What you need to know:

• Flood zones = restricted access to credit : More and more financial institutions are refusing to finance properties located in areas with high flood risk.
• Limited insurance : Basic homeowners insurance does not cover riverine floods. Additional protections are costly and sometimes inaccessible in high-risk areas.
• Property values affected : Homes in flood zones lose value, which makes resale and refinancing more difficult.
• Higher down payment required : Some banks require up to 35% down payment to finance a high-risk property.
• Evolving mapping : The Government of Quebec updates flood zone maps, which could reclassify certain properties and impact their financing.

💡 Proposed solutions:

• Creation of a Canadian Flood Insurance Program (PCAI) to provide affordable coverage to homeowners in at-risk areas.
• Implementation of resilience certificates to assess a property's vulnerability and facilitate access to insurance and credit.

📣 Conclusion: Property owners should stay informed, shop for insurance carefully, and consult experts before buying or refinancing a property in a flood zone. The climate is changing, and our ways of financing housing must adapt.

I built this text after reading the following websites (sources):

1. https://www.banqueducanada.ca/2024/01/risque-dinondation-et-credit-hypothecaire-residentiel/
2. https://xpertsource.com/blogue/actualite/fin-prets-hypothecaires-zone-inondable
3. https://lebelage.ca/droits-et-argent/finances/zones-inondables-votre-hypotheque-et-votre-assurance-seront-elles-touchees/