The Bank of Canda with the collaboration of the Canadian Mortgage and Housing Corporation have decided to tighten the mortgage act and rules to obtaining a mortgage. The amortization period has been reduced from 30 years to 25 years which makes for higher monthly payments for buyers. The 0% down payment has been abolished and buyers must now invest as little as 5% of the purchase price in order to purchase.
The objective of these amendements is to better qualify a buyers fianacial capacity and avoid a market crash if ever the real estate or economy softens. For real estate brokers this translates to less sales which will eventually translate to a slower and softer market. However low lending rates (mortgage rates) still allow qualified buyers to gain acces to the purchase of a property.
Hence, the importance of a buyer getting pre-approved before starting the house hunting with a realtor. By getting pre-approved you get a secured rate or a period of 3-6 months depending on the lending institution and minimize the risk of a higher interest rate. Getting pre-approved will also allow you to know your purchasing capacity and your realtor will aim for homes in this price range.