The federal government dropped the 2022 budget a couple of weeks ago. Immediately after, articles came pouring out about how it will impact different people, different businesses, different industries. A lot of it is difficult to decipher. Even more difficult is understanding what tangible impact it will have on your day-to-day life.
That’s why I thought a post like this was important. If you own real estate, are thinking of owning real estate, or you’re in the real estate industry, here are the parts of the budget you should know about.
There is big news that was announced earlier this month and it might affect home buyers in the market for a mortgage. The Office of Superintendent of Financial Institutions (OSFI) released a proposal to increase the qualifying mortgage rate for uninsured mortgages. Uninsured mortgages are ones where there is more than a 20% down payment.
The new qualifying rate will increase from the posted 5 year fixed rate, which is currently 4.79%, to the contract rate plus 2% or 5.25%, whichever is greater. This would effectively qualify consumers for 4% less mortgage. On a $1,000,000 purchase with a $200,000 down payment, buyers would qualify for around $755,000 vs $800,000.
Many are concerned that this could have an effect on our market by slowing it down.
2020… It will be known as the year of the pandemic. It will also be known as a year of a record-setting real estate market. We saw records for volume of sales and new high prices in many cities across Canada. To say there was a lot going on is an understatement. I have to admit I was happy to close my office and give everyone the week off between Christmas and New Year’s.