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New mortgage rules go into effect today in Canada but a recent survey suggests many people are unfamiliar with the changes.

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Andrew Beck's profile photoBrian Mairs's profile photo
Good pic. I feel that most don't understand the long
term savings of shorter terms.
The graphic shows the 'average' sale price of a Canadian home is $375K
In Vancouver $375K will buy you a home for your vehicle (garage), or something you would not want to move into.
With the average price in Vancouver at $752K, purchasers require $150K+ in non-borrowed funds (cash?)  resulting in a mortgage of  $602K.
Any sensible lender will qualify a homebuyer at the highest rate they offer to provide both with the most likely success (payment being made) and strongly promote the payments matching paycheques (bi-weekly / semi-monthly) to have the loan repaid faster, thereby saving more interest.
Getting a fixed rate at 6.75% (today's rates at the TD) over 10 years with a 25 year amortization requires a monthly payment of $4,124, which means the purchaser needs to earn a minimum of  $149K/annum to qualify.
Sexist as it may be, most lending institutions will only take into consideration 1/2 of the income from a woman of child bearing age (17 - 40) to ensure if she gets pregnant that the mortgage payment could still be made at least fort he time she is on maternity leave. So of that 149K/Annum - BOTH have to earn a minimum of $100K AND have 150K cash to qualify to get a mortgage.
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