Banks in Canada closely monitor levels of household debt and only lend to those who they believe can pay the money back,” said Dave Bauer, a spokesman for the Canadian Bankers Association.
New mortgage applications are down for single-family homes.
First time home buyers have driven into condo and townhomes market and many are forced to lower their expectations out of bidding wars and still unable to get their hands on anything that is available in their price range. The buyer who was prequalified under old rules has until June 2018 to close the sale but only up to the pre-approved amount. Those with cash from the recent sale of their home are only qualified for 40-50% loan to value. Pensioner with clear title to the property has no option but to sell or take a reverse mortgage for whatever amount they qualify for. Builders are tapping into the easy qualifying private mortgage to secure the properties first and ask for Bank mortgage later.