The government of Canada has decided that affordable homeownership is a desirable national goal.

The government of Canada has decided that affordable homeownership is a desirable national goal. Therefore, it has mandated that all lenders may not charge more than 3% interest on home mortgages. The prevailing rate (market equilibrium price) for current mortgages is 4.75%. What impact will this measure have on the supply of mortgages? Explain and draw a graph which reflects this scenario. What action might the government have to take to meet the demand for mortgages.