B.C.’s first time home buyers are snatching up real estate, according to experts, thanks largely to new Canada-wide mortgage regulations going into effect on Friday.
The spike in purchases, says Ryan DeLuca of Sotheby’s Real Estate, is owing to the fact that “Buyers are not completely aware of what the new mortgage rules entail.”
The changes include, among other things, shorter amortization periods.
Mortgages backed by government insurance will now be offered at a maximum of 30 years, down from 35, as part of an effort to ensure more manageable debt loads for all home buyers—but for first time buyers in particular.
Since mortgages will be spread out over less time, people’s monthly payments will go up but, says DeLuca, “not by a huge amount.”
“For the average person it will mean a change of about $100 per month. If you’d normally be paying $1500, you could now expect to pay around $1600.”
DeLuca said that those who can barely afford to carry a 35-year mortgage at present might be the type of buyer pushed into the market by the pending regulation changes.
“Pay check to pay check” potential buyers might be hit hardest by the change since, after March 18, there’s a chance they’ll no longer qualify for loans.
Notaries from around the province are encouraging both buyers and sellers to know their documents, and DeLuca urges those with existing mortgages to contact their brokers and banks to find out how they might be affected by the changes.