The Office of the Superintendent of Financial Institutions (OSFI) announced new restrictions on uninsured mortgages today. Effective January 1, 2018, all home-buyers with a down-payment of more than 20 per cent will have to qualify at the higher of the posted 5-year qualifying rate and their contractual rate plus 200 basis points (2 per cent).  This is in addition to policy announced in October of 2016 that required all insured borrowers qualify at the posted 5-year qualifying rate. 

In addition to the new stress test for uninsured mortgages, OSFI is also requiring lenders to establish and adhere to appropriate loan-to-value limits reflective of risk and the current economic environment and is prohibiting s lending arrangements designed to circumvent loan-to-value limits such as combing mortgages with other lending products. 

These new residential mortgage underwriting requirements will apply to all Federally regulated financial institutions.
 
The impact of the new stress test requirement will be to lower the purchasing power of households by up to 20 cent. Like past tightening of mortgage regulations, we anticipate that the market impact will be sharp but temporary. In the past, we have seen home sales decline in the 3 to 9 months following the implementation of tighter mortgage lending standards, with the severity of the impact fading within one year.  However, these new regulations impact a larger pool of mortgages and so the impact could be more significant than in the past.

“Copyright British Columbia Real Estate Association. Reprinted with permission.”

Is selling your property the furthest thing from your mind? Well, here are
some reasons for listing your property that you might not have considered.
1. Your property may be worth more than you think. (It’s difficult to
determine market value on your own. I can calculate it for you. Give
me a call.)
2. You might qualify for a better home than you anticipate.
3. Perhaps you are tired of your current property and want a change.
4. There may be homes on the market in a neighbourhood in which
you’ve always wanted to live.
5. Your current property may no longer meet your needs.
6. Your neighbourhood may have changed in ways you don’t like.
7. You might be ready to downsize or upsize and you no longer want to
put that off.
8. You may want to sell in the fall, so you can have a fresh start in a
new home in the new year.
9. Depending on the type of home you’re considering, you could end up
with lower mortgage payments or no mortgage at all.
10. You might want to move to a home that’s more conveniently
located near work, family and hobbies.
Of course, you may have your own reasons for listing this month. Why not
discuss them with a real estate expert? Us. We can answer your questions
and explain the options available to you.