October 17, 2016 5:13 am
Updated: October 17, 2016 8:40 pm

New federal mortgage rules come into effect today

WATCH ABOVE: For anyone looking to buy a home, the process just became more challenging. New mortgage rules kicked in across the country Monday. The idea is to protect homeowners from taking on too much dept. But as Eric Sorensen reports, the changes could impact more than just the housing market.

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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.

READ MORE: Feds to close tax loophole for foreign home buyers

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.

WATCH: First time home buyers could be impacted by mortgage lending changes 

Canadian mortgage brokers reported a flurry of borrowing last week as homebuyers tried to get in under the wire.

READ MORE: New mortgage rules to have minimal effect on rental market, experts say

Toronto-based broker Matthew McKillen estimated that he was 30 to 40 per cent busier this week than during a normal week.

WATCH: The Canadian Mortgage Brokers Association requests four mortgage rule exemptions

Watch below: First-time home buyers will likely be looking at cheaper homes now that the Trudeau government’s new mortgage rules have taken effect. The new rules mean potential buyers will need to go through a stress test for insured mortgages. Quinn Ohler has more on what it means for Edmonton.

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