Mortgage Rule Changes coming means buying a home is about to get harder yet again.
The Office of the Superintendent of Financial Institutions has just published their proposed changes to mortgage rules.
Guideline B20 – Residential Mortgage Underwriting Practices and Procedures.
Currently, if you had more than 20% as a down payment you could qualify at the posted mortgage rates. Coming soon the new Qualifying Stress Test will mean borrowers will have to qualify at the current mortgage rate plus 2%. This “Stress Test” rule is already in place for Lender Insured Mortgages and most Variable Rate and Short Term Mortgages. Now Uninsured Mortgages will be added.
What this means is Home Buyers will have a harder time qualifying for mortgages and at the lower end of the market would be home buyers will be knocked out completely. In Calgary, this will have an even bigger impact on the already high inventory condo market.
Home buyers that would have qualified for a mortgage of $400,000 will see their home buying power slip to about $330,000. Home Sellers will also be affected as fewer buyers in the market means more competition amongst sellers.
Great news for Landlords. As the government tightens mortgage lending rules. Would be Home Owners remain as renters.
“This could be one heck of a circus” says RateSpy.com
“A Major tightening of Mortgage Rules” says The Globe and Mail
It certainly is hard to keep track of all these mortgage rule changes we’ve had since the dawn of low-interest mortgage rates. Stay tuned, I doubt we are done yet.
Higher Bank of Canada Interest Rates threatened again this week.
Low-interest bank rates have been around for so long now that any upward change will be a shock to younger Canadians that know nothing else. We have been warned monthly it seems for the last 10 years of increasing rates. Keep saying it long enough and it will happen. The Government needs your money and gets it through interest rates and taxes.
July 12 is the next Bank of Canada rate change/or not day to watch.
If your plans include speaking to a mortgage expert then check out my list of
preferred Calgary Mortgage Agents
If your plans include consulting with a Calgary Realtor, then give me a call: Jerry Charlton 403 831 0842.