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What Canada’s New Mortgage Policy Could Mean for Home Buyers

The Canadian government recently released new mortgage legislation that will take effect across the country as of Monday October 17, 2016. The new legislation stipulates that all potential borrowers must undergo a “stress test” to evaluate their ability to make good on their loan should their financial situation change or interest rates rise. This new policy, which was created and implemented in a relatively short period of time, could significantly impact Canadian home buyers. Below is more information on this new policy and how it could affect your purchasing power in the real estate market.

What Inspired This New Policy?

Previously, “stress test” evaluations were not required for fixed-rate mortgages lasting longer than 5 years in Canada. The government’s decision to create this new mortgage policy came as a response to the changing Canadian real estate market. Housing prices have grown over the past few years, especially in metropolitan centers like Toronto and Vancouver. This new legislation was created to ensure that home owners don’t get saddled with debt that they are unable to pay off due to the drastically increasing prices of the housing market.

What Does This New Policy Mean for New Home Owners?

This new mortgage policy may make it more difficult for people to purchase homes that are out of their price range. In housing market such as Toronto, where prices continue to increase dramatically, this legislation may have the drastic effect of pricing people out of the market altogether. Luckily, the market in Kamloops and the surrounding area has a number of different properties available so it’s possible to find the perfect home that’s within your budget.

The support of a professional mortgage broker has never been more crucial within the Canadian housing market. For friendly and experienced brokerage in Kamloops and the surrounding area, contact Rose Blankenagel at Mortgage West - The Mortgage Centre. Her commitment to her clients and experience within the industry can help you secure a mortgage with the most affordable rate possible. For more information about mortgage brokerage and the real estate market in Alberta and British Colombia, contact Rose Blankenagel at Mortgage West - The Mortgage Centre today.