How’s this for an opener:
While the country’s new mortgage rules are meant to cool the market, eventually making housing more affordable, they’ve put home ownership out of reach for many prospective buyers.
Uh-huh. And what if the problem was that we put home ownership in reach of too many prospective buyers?
Those who don’t have a down payment of 20 per cent or more will be limited to a maximum amortization period of 25 years. Since 40 per cent of new mortgages last year were for 26 to 30 years, according to a survey from the Canadian Association of Accredited Mortgage Professionals, real-estate neophytes might feel the change most dramatically.
WHoa! Did they just say 40 percent of new mortgages were over 25 year amorts?
Another new rule announced by Mr. Flaherty sets the maximum gross debt-service ratio – the percentage of household income being used to pay for housing – at 39 per cent so buyers will be less likely to take on mortgages that are too big and could leave them floundering if rates increase.
That’s the one that Andrea Benton, a 37-year-old entrepreneur in North Vancouver, B.C., said hits her family of four hardest.
“It means my total family income would have to be an exorbitant amount to afford an $800,000 house,” she said.
You mean you’re expected to have a high income to afford an $800,000 house?!?
Read all the comedy in the full article here.