New mortgage rules take effect today
The Canadian Press
Published Monday, October 17, 2016 5:12AM EDT
Last Updated Monday, October 17, 2016 6:45PM EDT
TORONTO - New federal rules that will cut into the purchasing power of some first-time homebuyers take effect today.
The rules involve a stress test for all insured mortgage applications to ensure the borrower can still service their loan in the event interest rates rise or their personal financial situation changes.
Until now, stress tests were not required for fixed-rate mortgages longer than five years.
The federal government is making the change to try to stabilize the country's housing markets, particularly in cities such as Toronto and Vancouver where prices have gone through the roof.
Canadian mortgage brokers reported a flurry of borrowing last week as homebuyers tried to get in under the wire.
Toronto-based broker Matthew McKillen estimated that he was 30 to 40 per cent busier this week than during a normal week.