New mortgage rules: Do not curb your ambitions to become a homeowner!
The introduction of new mortgage qualification rules on January 1, 2018, raises many questions for aspiring homeowners. “Can I qualify for a mortgage? What are the consequences of the new mortgage qualification rules for my project to buy a condo? Have I saved enough to make an adequate down payment? ”
While the requirements are now more stringent to qualify for a mortgage with a lender, the Accès Condos financial tool represents an even more opportune lever for many Montrealers who want to buy a home and settle in Montréal.
Since the tightening of the rules to avoid over-indebtedness of households, all borrowers, whether they have a large or a small down payment, must now show that they have the capacity to repay their mortgage in the event of an increase of their interest rate. To do this, the bank will offer a current mortgage rate as part of the loan, but will qualify its client based on the Bank of Canada’s five-year benchmark rate.
The Accès Condos financial tool can therefore help you for several reasons:
• Thanks to the sharing of risks between the developer and the SHDM which accredits the projects, the condos are offered at affordable prices without any compromise on the quality of the building. For example, the prices of the condos offered at Faubourg Contrecœur Phase 5 range from $169,900 (including taxes) for the 1 BDR units and $214,298 (including taxes) for the 2 BDR units.
• A purchase credit of 10% of the condo price applicable to the down payment is offered to home buyers, which enables them to reduce their monthly mortgage payments and facilitate their mortgage approval.
• The initial contribution from buyers is only $1,000, which gives them more flexibility to increase their down payment and reduce the amount of their mortgage.
All these advantages give additional leeway to buyers who have the desire and capability to acquire a condominium, by allowing them to reduce the amount for which they must now qualify.
Online tools, including CMHC’s, can help you build your financial profile and better understand the mortgage rules: https://www.cmhc-schl.gc.ca/en/co/buho/buho_005.cfm.