Flaherty Taps Gently On The Brakes – “I just got pre-approved yesterday. According to the “experts”, I can buy a $700,000 house with 10% down on a 30 year term with my $93,000/year salary.”

Minister of Finance Flaherty today announced that, as of 19 April 2010, mortgage lending in Canada will have to be just a tiny bit tighter. Borrowers must qualify at a 5 year rate; equity withdrawal from a property is lowered to 90% (current 95%!); down payment on non-owner occupied properties is raised to 20% (current 5%). The very idea that there may be individuals in Vancouver who have extracted funds out of properties up to 95% of their current inflated values is completely mind-boggling. 90% is still speculation of the highest degree. It’ll be interesting to see how the Vancouver RE vehicle responds to this tap on the brakes. -vreaa

The banks will still offer a lot to buyers under the new rules.  White Payer (vancouvercondo.info 16 Feb 2010 at 10:11 am) would likely still get offered the terms they describe here -

“I just got pre-approved yesterday. According to the “experts”, I can buy a $700,000 house with 10% down on a 30 year term with my $93,000/year salary. Isn’t that just about what the Van income/price multiple is?” [Actually, at the current average Vancouver price/income multiple of 9.3, White Payer would be able to buy a property for $865,000 -ed.]

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