“Proposed Mortgage Rules Will Reduce Your Home-Buying Power By 21%” via”Huffington Post”
A proposal by Canada’s banking regulator to expand “stress tests” for mortgage borrowers will reduce how much house Canadians can afford by 21 per cent, says a new report from mortgage comparison site Ratehub.
Reducing affordability by that much is likely to lead to a 10- to 20-per-cent decline in house prices, said James Laird, co-founder of Ratehub.
“If implemented in their current form, the effects of these changes will be significant. When buyers can qualify for less mortgage financing, it puts significant downward pressure on home prices,” Laird said in an email to HuffPost Canada.
“Properties worth more than $1 million will be most affected by this change, which means that Toronto and Vancouver will be the geographies most impacted.”