Flood zones: major impacts on your mortgage

Since September 2024. However, the Montreal real estate market has been changing with the publication of a new preliminary map of flooding areas by the Metropolitan Community of Montreal (CMM).

Quarters like Pierrefonds-Roxboro. In addition, Ahuntsic-Cartierville and Rivière-des-Prairies are now considered at risk, thus overwhelming the dynamics of purchase, sale and mortgage renewal.

This revision. Moreover, based on advanced climatic data, obliges owners and buyers to adapt to an uncertain and potentially alarming financial landscape. Therefore, The new card indicates that there are more than 19,000 risk at risk.

Mortgage funding becomes more restrictive

Faced with the new map of flood zones, financial institutions adopt a more cautious approach. Consequently, Several of them now refuse to finance the properties located in a 0-20 year risk zone. In addition, which corresponds to a risk of being flooded at least once on a flood zones: major impacts your 20-year horizon, while others require a minimum of 35%fund. This situation also affects existing owners when they renew their loan.

“The financing of properties in flood zones becomes more and more difficult to obtain,” says Christelle Guenaing, mortgage broker. “Desjardins, a Quebec market leader, has ceased to finance the properties in high -risk zones, with rare exceptions. This trend is followed by several other lenders. ”

She adds that institutions are now requiring proof of adequate protection against floods. Without insurance or government assistance, they often require larger funding and additional guarantees.

Charles-Antoine Boudreau. mortgage broker at Planiprêt, underlines that there are certain banks, such as the Scotia bank, which accept a loan if the land is in flood zone and that the house is not. He also underlines that the TD bank provides for possible exceptions. for example if there is a dike or if the house is located flood zones: major impacts your in height.

Properties that lose their appeal

Residences located in areas identified as at risk on the new map of flood. zones are facing a significant depreciation. These properties. which are less attractive to potential buyers and more complex to finance, can undergo an estimated drop in value between 10% and 15%, according to my research, even if the government estimates that the new flooding regulations will only result in a loss of 4% of the value of residences located in these areas.

In addition, transparency concerning previous claims is compulsory during a real estate transaction or an insurance request. A property that has undergone floods can become practically impossible to sell if it does not benefit from adequate protections. insurance coverage.

Possible solutions

The federal government is currently developing a national flood insurance program. aimed at providing affordable protection to citizens while reassuring financial institutions.

Conclusion

For many Montreal flood zones: major impacts your owners. the new map of flood zones turns their reality upside down: houses that lose value, refusal of insurance, hardening of financing conditions … The impacts are real and immediate. These are no longer hypothetical scenarios, it is a very real crisis. To face it, you have to learn, adapt and make the right decisions.

Practical advice

1. Check the status of your property on the official map of flood zones.
2. Consult a mortgage broker before a transaction or refinancing.
3. Document all the previous protective work and claims.
4. Find out about the subsidies available to improve the resilience of your property.