There is no good news for home buyers, Canada’s new mortgage rules have made approval a bit difficult. What is it about?
Prospective home buyers in Canada have a tough time with new mortgage rules that went into effect June 1 to cool the housing market. These state that applicants must demonstrate that they can pay a mortgage rate that is 2% higher than their contract rate or 5.25%, whichever is higher, instead of the previous threshold of 4.79%.
The update of the rules is altering the amount of income that a buyer must demonstrate to pay a mortgage, for example, according to the report published by Zoocasa, the real estate broker, to pay a mortgage in the Montreal Metropolitan Area you must have a salary of $ 108,000, where the median home price is $ 565,208, an increase of $ 5,000 compared to the previous rules.
Also read: In these 10 cities near Toronto you can buy a house with more than 4 bedrooms for less than $ 500 thousand dollars
Zoocasa drew a map to show how much money Canadians must earn in 11 major cities to get approved for a mortgage. It shows that in Greater Vancouver, where the median home price is $ 1,211,233, buyers must have an income of $ 230,000 to pass the new mortgage threshold. This is a dizzying increase of $ 9,000.
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Looking at the big city of Toronto, it can be seen that prospective home buyers will need a salary of $ 207,000 to be approved for a mortgage for the median home price of $ 1,090,992. This means that the stress test change has resulted in a requirement of $ 8,000 in additional income.
Regarding the amount of additional money that future buyers will have to save to acquire a home, it can be seen below, on the map provided by Zoocasa.
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