Buying a house is our risk
The government is shortening the amortization period for mortgages and reducing the percentage of your income it will allow you to spend on housing. This is supposed to reduce the demand for housing and it certainly will.
Purchasing a home has often been thought of as a way to invest intelligently. After all, homes appreciate in value over time as mortgages get paid down. Not only that, but a home is an investment you live in. This article from the Ottawa Citizen is a commentary about how new regulations may make it more difficult for new investors to enter the market.
The demographic most likely to be affected by the tighter regulations is believed to be young first-time buyers. The new fixed percentages for gross and total debt service ratios, coupled with home prices will require higher incomes to afford a home, a challenge for a 30 year old establishing their career. Choosing how much to spend on a home is a personal choice influenced by personal needs and estimated future earnings, but new lending regulations seem to force many to continue to rent.
If you're a first-time buyer wondering how new lending regulations will affect your ability to enter the market, feel free to contact an Ottawa Mortgage Broker.