Should I Freak out!? Can I Still Buy A House

Well maybe not freak out...BUT... If you have less than 20% down, you are going to lose about 20% + of your purchasing power. 

This means the following:
If you wanted to live in Toronto, you might have to live in Etobicoke.  If you wanted to live in Etobicoke, you might have to live in Mississauga.
If you wanted to live in Mississauga, you might have to live in Milton.
and so on...

Overall,  since October 17th, if you do not have 20% down, you might have to consider moving west... or east...or settling for a smaller place. 

This new rule was imposed by the Federal Government to "ensure a stable housing market".

What it really does…..is limit the borrowing power of the regular person.

EXAMPLE: Assuming 5% down

If you earn $50,000/ year salary…. you could qualify for a mortgage of approximately $333,000. Purchase price of $348,000.

Since October 17, 2016……the max mortgage you can now qualify for is approximately $262,000. The purchase price is approximately $275,000.

If you have 20% down payment, no worries for now!

ANOTHER BIG CHANGE ComingNovember 30th

If your mortgage is with a lender other than the big banks such as Industrial alliance, Merix, RMG, First National, Lendwise, Home trust... you will likely lose the opportunity to refinance for either debt consolidation, renovations, or equity take out by the end of November.  There will be options as some of these lenders have already been looking at different ways they can fund those refinances, but rates might not be as good as they currently are.

If those lenders stop offering refinances afterNovember 30th there will still be options by moving you to a brand new lender at full penalty cost or possibly adding a 2nd mortgage in the 3% range with some of the credit unions we deal with.

Either way the refinancing landscape has already changed and will get even tighter after November 30th.  Let me know if you need me to run some numbers for you.