VANCOUVER (NEWS 1130) – Getting a mortgage in Canada just became a little harder, and the new year also rang in a new stress test for potential home buyers.
Borrowers with an uninsured down payment of 20 per cent or more must now prove they could afford a rate hike of two percentage points, or the Bank of Canada’s five-year average rate.
That could affect upwards of 20 per cent of potential homebuyers, shutting some out completely.
Samantha Gale with the Mortgage Brokers Association of BC says the new rules could impact 10 to 20 per cent of homebuyers, and could shut some of them out completely.
“If your option is to purchase a property that is less expensive, obviously you’re going to be looking outside of the city core. We’re hearing that some of the outlying city centres like Kelowna and Victoria are becoming more popular.”
She says it could also mean more people seek out different lenders.
“There are still alternative mortgage lenders, there are credit unions which are provincially regulated. So it’s just the banks that are impacted.”
It remains unclear if the new rules will affect the sky high house prices in Vancouver.