Dec 31st Mortgage Overhaul
Alex Burns from RE/MAX and VictoriaHomes.com speaks with Jason Chapman from Mortgage Architects about the upcoming changes to mortgage lending rules coming up in December.
This major shift will affect over 80% of Canadians. Listen in as Alex and Jason discuss what this means for you, and how you can be ready for the biggest change to lending rules Canada’s history!
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Here’s some of the highlights:
Alex: What should we expect coming in January?
Jason: This will affect anyone with 20% or more equity in their home. This is the biggest lending rule change in Canadian history and the reason why is because 4/5 people in Canada have 20% equity in their home or buy a home with 20% equity down.
Alex: So let’s say I’m a first time home buyer and I have 20% to put down on a home. So let’s say I’m qualified for $400,000 and I have 20% to put down on a downpayment
Jason: How it’s going to affect you is that today we would qualify you based on the rate you’re going to get, so 3% or something like that. Once January comes along, you’ll have to qualify at the greater of either the benchmark rate, which is 4.99%, or 2% above the actual rate you get. So if you qualify at 3.09% you’ll have to qualify at 5.09%, whichever is greater.
Alex: So you still get the 2.99%, you just have to qualify at the higher rate to see if I can manage that rate. The banks just want to see if I can manage that rate, so if the rates go up then perhaps I won’t be sinking.
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To hear the full interview, and to find out how this will affect your situation, check out the full interview above or contact us at Victoriahomes.com!
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