Some homebuyers could have a tougher time getting a mortgage starting today.
New federal rules take effect that involve a stress test to make sure the borrower can still pay their mortgage if interest rates were to rise or their financial situation changes.
The federal government is making the move to trying to stabilize the country’s housing markets, particularly in Vancouver and Toronto.
Realtor Michael Froese tells Global News, those who qualify for a mortgage could have to lower their expectations.
“That might actually affect the kind of home you buy. Maybe you have to go for fewer bedrooms, or maybe you have to even change neighbourhoods.”
Financial consultant Glen Melnyk suggests this is a good move by the federal government.
“People now are starting to live way beyond their means. What happens if you lose your job, what happens if you get transferred, what happens if you have to sell you house?”
But Froese feels this is a federal solution to a regional problem, referring to skyrocketing home prices in Vancouver and Toronto.
Canadian mortgage brokers reported a flurry of borrowing last week as home buyers tried to get in under the wire.