Lots of things change with the arrival of New Year, similarly, this year has brought changes to the current mortgage rules in Canada. Also, these changes will affect the market conditions as well according to Digital Money Trend Report. Some of these changes that are expected to stay this year and these changes are mentioned in this article.

Down Payment

No visible changes have been made to the policy regarding down payment, but putting more money upfront plays an important role in buying a home, especially for the first time. With the evolution of Canadian mortgage policy, there are many benefits of putting 20% down payment. If you are buying a home for the first time then putting 20% down payment is the only way for you to do it.

Financial Help

Therefore in order to invest 20% in down payment home buyers are definitely going to need financial assistance. In the past monetary gifts from parents to their children play the role of additional help, but now it is no longer a bonus because now you cannot step into the market without having that money in your hands.  According to a report, home buyers usually take financial help from their families, especially when buying a home for the first time.

Mortgage Options

Five-year fixed rate mortgage plan is one of the popular mortgage plans in Canada because it allows you to pay fixed monthly payments for a specific time period. According to a survey report, 72% first time home buyers choose fixed rate mortgage plan for buying their homes between 2013 and 2015 and 67% of these people to choose five-year mortgage term. This is because the difference in interest rate between fixed rate and variable rate mortgage has been narrowed down in 2016, the only reason why people used to go for variable rate mortgage.

According to one of the new rules, the five-year fixed rate mortgage is now to be qualified according to Bank of Canada’s rate which is 2% high than the proposed rate. But according to the latest rules, people can now apply for all types of mortgages with less than 20% down payment and a term using the Bank of Canada’s qualifying rates. This means that if home buyers did not qualify for a five-year fixed rate mortgage they can look into other options whether they are variable rate mortgage or other fixed rate mortgages.

Use of Mortgage Broker

This means that now it has become more difficult for clients to gather the information and choose a suitable mortgage plan on their own. Even now more people rely on banks regarding their mortgage issues, mortgage brokers have been growing their share of the mortgage market, and more people may turn to mortgage brokers in order to help them decipher the new qualification requirements and find the best lender.

Benefits of a Mortgage Broker
Why Avon Financial
Mortgage Glossary