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Expert: new mortgage rules to hurt first-time homebuyers

VANCOUVER (NEWS1130) – First-time homebuyers will feel the pinch the most from new mortgage rules introduced this week by the federal government.

Finance Minister Jim Flaherty announced the maximum amortization period will be decreased to 30 years from 35 as of March 18th.

Jared Dreyer with the Mortgage Broker Association of BC says the 35 year mortgage was helpful to many marginal buyers. “It allowed people the opportunity to get into the marketplace with a low monthly payment. The key thing is if people want to accelerate their weekly or bi-weekly payments, the amortization went down close to 30 years anyway.”

Dreyer predicts a rush on the market before the change kicks in. “I think you are going to see a lot more people going out to purchase homes, especially the first-time homebuyer.”

Other experts say they would rather see the change than a hike to the interest rate.