The Canadian federal government recently announced new legislation that may affect the purchasing power of home buyers. These new mortgage rules, which go into effect as of October 17, may have a huge impact on the Canadian housing market. Here is some more information about these new measures and how they could influence Canadian home buyers.

What Is This New Policy?

This new mortgage legislation requires that all insured mortgage applicants undergo a “stress test” to evaluate whether or not borrowers could still service their loans if their financial situation changed or interest rates rose. Previously, these types of evaluations were not necessary for people acquiring fixed rate mortgages of five years or longer.

The change in legislation came as a response to the rapidly rising prices of the Canadian housing market, particularly in cities like Toronto and Vancouver. The government has stated that this new policy will help ensure that borrowers don’t place themselves into financial situations from which they cannot recover.

The government pushed to implement this new legislation relatively quickly, leading to a spike within the housing market before the new rule took effect.

How Will This Influence Montreal Property Buyers?

This new legislation may make it more difficult to acquire mortgages for properties that are well out of their price range. In housing markets like Toronto and Vancouver where real estate prices are growing exponentially, this legislation may have the adverse effect of pricing people out of the market. Luckily, the real estate prices in Montreal are relatively stable compared to the rest of the country, making it easier for buyers to find properties within an affordable price range.

The changing landscape of the Canadian real estate market can be intimidating, but with the right foresight and planning it’s possible to purchase the home of your dreams. The experienced and professional brokers at Team Levine can help you find the best mortgage rates to help you buy your dream home. For more information about our mortgage related services, contact us today.