Concern has been expressed by CMHC that we could see a correction in home prices between 9% and 18% over the next 12 months. This concern has led to the tightening of the rules for offering mortgage insurance effective July 1, explains CTV News' Chief Financial Commentator Pattie Lovett-Reid.
TORONTO -- Concern has been expressed by CMHC that we could see a correction in home prices between 9% and 18% over the next 12 months.
These rules are intended for riskier borrowers who have less than 20% down payment to access CMHC's default mortgage insurance. Your gross debt servicing number has gone down, meaning that your mortgages costs will need to be lower and that results in less home being purchased., using the current mortgage qualifying rate of 4.94% and GDS limit of 39, a family with an annual income of $100,000 and a 10% down payment would have qualified for a home valued at $524,980.This represents a decrease in buying power of almost 12%, due to the change in the GDS limit.
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