Stricter real estate measures will help keep buyers out of debt, according to the Chatham-Kent Association of Realtors.
Starting today, all insured mortgages will have to undergo a stress test to determine whether you'll still be able to pay your mortgage, should interest rates climb.
Steve Carroll, with the Association's political affairs committee, says expanding the stress tests means you'll have to qualify for your mortgage using a higher interest rate than what you might actually be paying.
"I think what it does is protects buyers more. If you have buyers who have high-ratio mortgages -- and of course that's what this is, it's mortgages that are insured -- it sort of reinforces that they can qualify for a higher rate," says Carroll.
Mortgages will now be weighed against the Bank of Canada’s posted rate, which was most recently 4.64 per cent.
Carroll says just how much home you can afford will probably be less under the expanded stress tests.
He says that means you won't be paying more, but some people might not be able to access mortgage insurance.
"Some people may not be able to qualify [for a higher rate], but they may have been people that couldn't qualify in the first place," Carroll says. "It's important that they know that they qualify for a higher rate on an insured mortgage."
Despite this, these tighter federal rules are not expected to reverse the positive trend in home sales the Association has been seeing.
"We never know [for sure]," he says, "but I don't think these changes are going to have a dramatic impact on our activity in Chatham-Kent."
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