Photo: James Bombales
Yesterday, the Bank of Canada reported that new mortgage rules, set to take effect on January 1, could disqualify almost 10 per cent of prospective homebuyers. But, according to a new survey, it seems many Canadians have never heard of the rule change at all.
Polling from RE/MAX has found that 37 per cent of Canadians aren’t aware of the new rules at all.
“[The survey] demonstrates there remains a gap in awareness and understanding amongst Canadians of how the new OSFI stress test regulation changes may impact them moving forward,” writes RE/MAX INTEGRA regional director Christopher Alexander, in a statement.
While roughly a third of Canadians surveyed hadn’t heard of the new regulations, 48 per cent said that they were considering purchasing a home in the next five years.
Alexander says that it is vital that would-be homeowners educate themselves on how the new rules could affect their purchasing power.
“For the nearly half of Canadians that plan to buy a home in the next five years, it’s important that they take the time to learn about the new rules and make an informed decision before looking to enter the market,” he writes.
Last month, the Office of Superintendent of Financial Institutions (OSFI) announced a new stress test which will require all uninsured mortgage borrowers to qualify against the Bank of Canada’s five-year benchmark rate, or at their contract mortgage rate plus an additional 2 per cent.
The test is intended to ensure that uninsured borrowers can withstand higher interest rates. The overnight rate — which influences mortgage rates and sat at a historically low 0.5 per cent earlier this year — has been raised 50 basis points since July, with further hikes predicted in 2018.
Of Canadians who were aware of the rule changes, 18 per cent reported that it would impact the type of property they purchase in the future. Other industry players have noted that the rules could be bad news for would-be homeowners and the real estate market as a whole.
“This change will certainly slow down demand and with it the market,” CIBC Senior Economist Benjamin Tal told BuzzBuzzNews. “The question is not if it will affect the market, but how much.”