There’s been a lot of talk and a lot of speculation about how the Federal Government’s new Mortgage Qualification Rule might affect the buying and selling of homes in Saskatchewan.
The new rule means that even though mortgage rates are available for less than 2.5 percent, buyers will have to qualify for a 4.64 percent, 5 year mortgage, in order to actually get any mortgage at all. That is, unless they are able to put down a down payment of at least 20 percent.
Some experts thing the change could result in a drop in house prices, or at least a drop in sales of higher-end houses, as new-home buyers especially, have to settle for something less than they would have otherwise bought.
Others say it won’t make any difference at all, as many banks and mortgage brokers encourage buyers to buy less than what they would have previously qualified for anyways, as it is risky to extend yourself to your limit at today’s extremely low rates.
And not being able to purchase quite as expensive a house as you would have before doesn’t have to be a negative thing. Saskatoon Mortgage Broker Sarah Schiess pointed out that “a smaller mortgage means smaller mortgage payments, so instead of being house poor you can enrich your life in other ways.”
No one wants to see any kind of a situation where people are losing their homes because of an increase in mortgage rates, and the Federal Government’s new stress test rule means that we should be safe from that scenario for the forceable future at least, and that should be good for both home buyers and sellers.