Did you hear about the big changes coming July 9th?
If not, there are a handful of significant changes that will affect us all short and long term when it comes to being a property owner.
Last week, the Canadian Mortgage and Housing Corporation (CMHC) announced that they would be cutting back the life of a mortgage from 30 years to 25. This means when someone takes out a new mortgage, they will pay off their mortgage quicker but will have larger payments. The problem here is that what you used to be able to afford, or had in your future plans, may not be attainable anymore.
There is positive news for those of you who are up for a mortgage renewal in the next while. If you took out your mortgage with a 40 year amortization, or even a 35 year, with the new rules imposed July 9th, the end of your 5 year term is leaving you with 35 or 30 years remaining on your mortgage. You will still be able to get a 35 or 30 year mortgage with the banks as CMHC will permit you to do so. Talk with your lender to get the full details on how the changes will directly affect you.
A question I am frequently being asked is what will this change do to the housing market? My professional opinion in short is, it is a great move for the economy in general, yet the change will put pressure on some higher valued home prices. The higher the price of a home, the higher the pressure on the value will be. The condo and townhome market has not been stellar in the last few years (Fraser Valley) and this change should largely drive traffic back to these types of homes as attaining a detached home will now be tougher under the new rules. With the affordability going down, more people will be pointed towards condos and townhomes, helping boost this market up in productivity.
If you have any questions regarding the changes, please feel free to contact me directly at 604-374-6145 to chat.
Until next time,