New federal mortgage rules take effect today and that means it’s going to be tougher for first time home buyers. The rules are aimed at cooling overheated real estate markets in this country including here in Durham Region.
This house on Rimosa Court in Oshawa is on the market for 524-thousand dollars. Under new mortgage rules, you would need 20 percent of this as a down payment to secure a mortgage for this home, or roughly 105-thousand dollars up-front. Experts say this will hurt first time home buyers. However, this mortgage broker says that’s not necessarily the case.
Kurt Henry “It’s only for people that have less than 20 percent down when you have to qualify at that higher rate. If you’re a first time home buyer and you have 20 percent down or more then this wouldn’t necessarily affect you.”
The new rules from the federal government, effective October 17, are highlighted by a number of changes. The big one consists of testing to determine if a borrower could afford to pay back a loan if the interest rate goes higher. The borrower is judged against a standard rate of 4.64 percent, when the actual rate is likely a lot less. However, Kirk Henry believes the real estate industry will benefit from this.
“I think that this is probably a good thing for the real estate industry long term. I think short term there will be a little bit of short term pain for long term stability and long term gain perhaps.”
Oshawa Conservative MP Colin Carrie says the Liberals have already made it tough enough for Canadians by breaking promises to reduce taxes.
“The Liberals should be helping Canadians by giving them the tools they need to save, lower their taxes and create jobs. Instead, the economists are predicting that the Liberals housing policies are going to reduce the value of peoples homes across the country.”