With the new mortgage rule this past week affecting the benchmark interest rate, I’ve had a lot of questions, the most frequently asked….
“What do we now qualify for and what does this mean for our family?”
Just a quick refresher of an example of what this means to Albertan’s, courtesy of CBC.
“Prior to today, an Alberta family with a household income of $80,000 and a minimum down payment of five per cent would likely have qualified for a $400,000 home but now they will be approved for a $320,000 home.”
That’s a Huge reduction in purchasing power……but is it all bad? There are two sides to this argument, both of which have very valid points. As a real estate professional we want to find the most suitable property for our clients at the best possible price we can negotiate. Providing insight to our clients along the way. As Albertan’s we’ve been so fortunate in past years of an ever growing economy and disposable income to spend as we see fit. This new rule, in my mind simply acts as a “checks and balances” sheet or a “safety net”, taking steps to protect the buyer to make sure if things in life happen(as they always do) you can still afford the home your in. Starting out in a more modest home may actually have more upside in the end. There may be reno’s and projects you and your family can do over time that unlocks tremendous value when its time to sell, allowing you to then make the move of your dreams:)