The New Government Restrictions on Mortgage Qualifications
January 1st the new Government Mortgage lending restrictions will take place, and we wanted to help clarify what this means to those of you who are already homeowners, and those prospective buyers watching the market, and wondering how this impacts their future plans. Here is part of an article from Dominion Lending Centres explaining what to expect.
“When – Jan 1st, 2018 – Lenders may adopt new policies sooner due to the date selected
Who is affected by these upcoming changes?
#1 Nobody renewing an existing mortgage.
#2 Nobody purchasing a home with LESS than a 20% down payment.
OK, so who then?
People with more than 20% to put down on a new purchase, or with more than 20% equity in their home.
Yep, the group that represents the absolute lowest risk to market stability. You may have amazing credit, a great income, and 20% or more down…but you will have your mortgage maximum cut by a solid 20% over where it has stood for the past twenty years or so.
Is this a big deal? Yes and No.
No, because the majority of Canadians rarely borrow 100% of their maximum. The group hitting their maximum tend to be the same group that has LESS than 20% to put down and that group was addressed by the government last October.
In other words the impact of these rules will be small overall…mostly…”