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Housing Critic Warns of ‘Change and Pain’ Under New Rules

January 1, 2017

As of October 17, the regulatory changes has subjected all insured mortgages to “stress testing”, which measures a particular borrower’s capability to fulfi ll mortgage payments under the Bank of Canada’s 4.64 per cent posted rate for fi ve-year mortgages.

recently announced changes to federal mortgage rules will directly aff ect the main drivers of growth and activity in the country’s real estate sector the fi rst time home buyer or people with less than a 20% down payment.

It is noted that the new requirement to test insured mortgages against the major banks’ 5-year posted rate of 4.64 per cent will impact thousands of consumers. Prior to the announcement, the qualifying rate went as low as 2.17 per cent.

a household with $100,000 in total income the stress test could mean a 20 percent drop in approved mortgage value. For some this may be a good opportunity to save more money for a larger down payment, and give markets a chance to adjust and acclimatize to the new rules.

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