Effective January 1, 2018, the Office of the Superintendent of Financial Institutions (OSFI) will be implementing new mortgage regulations that could reduce Canadian's ability to purchase and refinances homes. The new rules are being implemented as a measure to slow down the housing market and ensure home buyers can manage their payments even if interest rates rise.

The new mortgage rules require all home buyers (even those who have down payments of 20% or higher and do not require mortgage insurance) to qualify based on the higher of the posted rate for the 5-year fixed rate product - currently 4.99% - or the mortgage rate offered by the lender plus 2%. This means new home buyers will qualify for less mortgage loans and/or they will see higher interest rates charged as they are forced to turn to alternate lenders.

If you know someone who is considering buying or refinancing in the New Year and believe these tighter mortgage regulations will affect their borrowing ability, have them contact me now to discuss and arrange financing or to secure a pre-approval before the end of the year.