The Office of the Superintendent of Financial Institutions (OSFI) has released guidelines for the mortgage industry that will take effect on Jan. 1, 2018.

What does this mean for buyers and sellers?  Recent previous changes meant insured borrowers (those putting less than 20% of the value of the home down on the purchase) had to undergo a stress test to ensure their ability to pay back their loan, should interest rates increase.  Under the new rules, uninsured borrowers will also have to pass a stress test and buyers will have to show they can afford their mortgage payments at either the Bank of Canada five year average or 2% higher than the rate they’ve secured, whichever is higher.   For sellers, this means as of January, qualified buyers, insured or otherwise, maybe looking in price ranges some 20% lower than they currently qualify for.

This means that if you are looking to buy or sell and this affects you, hurry up and give us a call.  A deal needs to be approved for financing (unconditional) before January 1, 2018 and close within the first 4 months of the new year.

This will also affect sellers who will see their Buyer population shrink at the same time.  This is a great time to sell while pre-approved buyers rush to purchase under the current rules.

For more information, visit the OSFI website :