Mortgage rule changes
** ATTENTION,
If you are looking to buy Real Estate please keep reading…
After several years of the Bank of Canada changing the rules to home buying/qualifications, this new rule change today will hurt the housing market in my opinion. This will slow home buying and drop prices all together in this market. I have attached the article to read, but to summarize:
When I qualify a client on a 5 year insured term, I simply use the 5 year rate that they will be paying. After October 17th, I and all other lenders will have to use the bank posted rate of 4.64%. So as per the example below, you tell me what is going to happen to home prices and the number of your clients that can’t get into the homes you have been showing.
The new qualifying mortgage rate announced today means people will not qualify for as large a mortgage as before. Under the current qualifying rule, someone earning a combined $60,000 with 0 per month in non-mortgage loan payments would easily qualify for a $350,000 home with a 5 per cent down payment. Under the new rule they will not qualify for the same home, that value drops to $270,000. The new rule goes into effect Oct 17th (and probably unofficially a few days sooner.) If you were planning on buying a home you’ve got two weeks at the most before you are impacted by the tougher qualifying rule.
http://www.cbc.ca/news/business/ottawa-housing-tax-real-estate-1.3788725
Duane Springsteel
Mortgage Broker
The Mortgage Group AB
