Understanding Mortgage Changes

In our business, other businesses effect how the real estate market adjusts itself. If you don’t quite understand what I mean, let me briefly explain. In the article attached to this post, it mentions the new mortgage rules set by the federal government. These rules are simply adjusting the length of time a mortgage can be amortized over, from 35 years back to only 30 years. This is great news for the long term stability of the real estate market, however there are some real problems for the short term market. The article explains some of the highlights.

The bottom line is that the short term market (30 days) will quicken, with house prices rising because there is not enough inventory to support the feverous buying of people trying to secure a mortgage before the changes come into play. This surge will dampen once the mortgage rules are in effect, and house prices will dip slightly for a few months. In the later part of the year, the Guelph real estate market will steady off again. The greatest effect will be on first time home buyers, where their affordability will decrease. Their monthly cost will jump which means they can only afford a smaller price tag. This might mean more people have to wait to buy their first house or investment property.

Mortgage Rule Changes Article

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