New federal mortgage rules that could mean some buyers will qualify for a smaller amount than they hoped for could be positive for consumers, according to a Saskatoon-based mortgage broker.
“Qualifying for less doesn’t equate to being a bad thing,” said Sarah Schiess, the founder of Saskatoon-based Mint Mortgage.
“A smaller mortgage means smaller mortgage payments, so instead of being house poor you can enrich your life in other ways.”
The federal rules went into effect Monday and include a stress test for all insured mortgages. The test was previously not required for a fixed-rate mortgage that was longer than five years.
“This stress test shows that you can handle it if there is some fluctuation … if the rates do go up in the short term or if you’re in a variable rate,” Schiess said.
The rules can mean a difference of thousands of dollars, according to first time home buyer Leighland Hrapchak. He secured his mortgage through Schiess’ company and said he made sure to buy before the new rules took effect.
Hrapchak said he would have qualified for $50,000 less under the new rules.
“If I would have had that decrease, it would have been a townhouse or a condo, or a home that I would have had to do a little work on,” Hrapchak said.
“I wish I wasn’t so rushed, I wish I had a little more time to really mull it over, but overall I am happy with my purchase.”
Schiess said buyers who waited or are now in the market should expect “much richer” conversations than they used to have with mortgage brokers.
“You should expect them to really ask some questions and really look for somebody who’s going to provide solutions for you because you have choice.”
Schiess added that the new rules likely won’t push people out of the housing market, because personal debt is usually the main thing standing between a buyer and their dream purchase.