New mortgage regulations could make home buying more difficult for Ontarians
New mortgage payment regulations could make it harder for Ontarians, who already pay more than almost everyone else in the country, to buy a home.
A new stress test on mortgages went into effect on June 1 and could lead to lower activity in the housing market.
Under these new regulations, those taking out a mortgage will have to demonstrate that they are able to make payments at a rate of 5.25 percent, an increase of 0.46 percent from the old rate. , which was 4.79 percent.
Additionally, those with an uninsured mortgage – which is more than a 20% down payment – will need to pass this test, which is a new addition (previously only those with an insured mortgage were required to pass).
This new regulation could reduce the average mortgage amount available to potential buyers from $ 14,000 to just $ 47,000.
According to a recent report from LowestRates.ca, Ontarians pay an average of $ 140,215 for down payments, or 20.35% of the average price of a home – the only province with a higher average in the country is British Columbia.
Conversely, residents of Quebec pay the least down payments in the country – Ontarians pay $ 81,000 more in down payments than residents of Quebec, who pay only 14.68% of the price of a home. which, on average, is just over half the price in Ontario.