An example: the impact of the new government housing rules.
Provided to us by Patti Lewis, Mortgage Agent at Invis, an example of the impact the new government rules will have on purchasing power.
Client with an income of $100,000 would qualify to purchase a property valued at $625,000 with a 5% down payment of $31, 250. Net mortgage of $593,750 using a 5 year fixed rate of 2.39% and a 25 year amortization period.
Same scenario but now we have to use rate of 4.64% to qualify the deal (even though client will still have fixed 5 yr rate of 2.39%). The client would now only qualify to purchase at $450,000 with a 5% down payment of $22,500 and net mortgage of $427,500.
This reduces the purchasing power by 25-30% !
In her opinion this is going to have a huge impact on residents in the K-W region, especially 1st time home buyers.
Read more on the changes: Four major changes to Canada's housing rules
Posted In: Industry & News Updates