What Home Buyers And Sellers Need To Know About The New Mortgage Rules
Wednesday Oct 18th, 2017Share
The new financial ‘stress test’ - HOW DOES THIS AFFECT YOU?
A family with an annual income of $100,000 with a 20% down payment at a 5 year fixed mortgage rate of 2.99% amortized over 30 years can currently afford a home worth $719,630.
Under the new rules, they need to qualify at 4.99%.
Now they can only afford a home worth $596,428 - a difference of $123,202.
On October 16th, 2017 new mortgage regulations were released that will affect both home buyers and sellers in Canada. Starting January 1 2018, the new regulations will make it more difficult to qualify for a mortgage. Home buyers, and those looking to refinance, can expect a more rigorous qualifying process designed to reduce the amount of debt Canadian’s are taking on when it comes to making real estate purchases.
This new financial ‘stress test’ is a big move forward in an attempt to ensure that Canadians can afford their homes even if interest rates rise. While the Office of Superintendent of Financial Institutions is confident in their decision, it remains to be seen how large of an impact the rule changes will have on the Canadian real estate market, and the economy as a whole.
So what does this mean, specifically, for the Oakville, Mississauga, Milton and Burlington real estate market?
The end of 2017 is about to become a lot busier with an increase in motivated home buyers who want to make a purchase before the January regulations take effect. After the new regulations are in place, the price-point that many home buyers qualify for will be reduced.
If you have been thinking of selling your home, it is wise to get it on the market this Fall, as soon as you can. There will most likely be an increase in home buyers looking to make offers before the end of the year. After the New Year, it is realistic to expect a slow down and it may be more difficult to sell your house as potential home buyers adjust to the new regulations.
Work With Sue Heddle Homes
With upcoming changes in the real estate market, it is very important to work with a real estate agent that can help you get what you want, whether it is buying or selling a home. Sue Heddle Homes has extensive experience getting clients what they need and provides high level customer service that will make your real estate experience as stress free as possible.
To find out more about selling or buying a home either before the new mortgage rules take effect or in the new year, contact Sue Heddle.