A Saskatoon real estate broker is glad to see housing could become more affordable with the federal government’s new mortgage stress test rules, but he’s questioning why a regional approach wasn’t taken to help first-time homebuyers.
Royal LePage’s Norm Fisher noted the stress test initially was set up in 2016 to counter concerns following increase in prices for homes in Toronto and Vancouver, saying he would have liked to see Ottawa take a regional approach to housing markets across the country.
“If we were looking at something that took regional differences into account and the difference was one per cent, it would be far more substantial. We’d be talking $40,000 worth of additional buying power,” he said.
Fisher added larger markets have seen consistent increases in listing and sale prices, while the prices in places like Saskatoon and Regina have dropped.
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The new rules, which go into effect April 6, look at the previous week’s mortgage insurance applications from across the country, taking the median five-year fixed rate and adding two percentage points.
If someone went into a bank this week, the new rules would work out to an additional $10,000 to $15,000 in buying power.
The current test looks at the Bank of Canada’s five-year posted rate — which is determined by rates from the country’s six largest banks.
One mortgage broker is excited for the first-time homebuyers who are reaching out to him now that the federal government has adjusted regulations around the stress test.
Even though it’s a modest increase, Chris Kolinski said buyers who have a down payment less than 20 per cent could hold off on signing a mortgage until April 6 — especially those on tighter budgets.