Ottawa to impose new rules on first-time home buyers
Ottawa is expected to announce new rules Tuesday that would make it more difficult for first-time buyers to enter
Sources tell The Canadian Press that Finance Minister Jim Flaherty is ready to make changes because of concern Canadians may be taking on too much debt.
Economists have advised the minister the best way to protect Canadians is to institute a debt affordability test to qualify for a Canadian Mortgage and Housing Corp. insured mortgage.
Currently, prospective home owners can qualify for a CMHC insured mortgage if they put at least five per cent down on the cost of a home.
But bank officials say they usually apply a cushion to ensure home buyers earn enough money to meet payment requirements if floating rates rise.
Flaherty is expected to make such an income test a condition for acquiring an CMHC insured mortgage.
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