A new survey says 56 per cent of Canadians see qualifying for a mortgage as a barrier to homeownership. This is up six points from a year ago.
The report by Zillow also found that this concern rises to 64 per cent for consumers who recently purchased a home, likely linked to the mortgage regulation changes looming at the time of their home search.
“After mortgage qualification, the next top worry for buyers is whether they can afford the mortgage payment: More than half (54 per cent) report this as a barrier,” said the report by the online real estate platform.
“New and stricter mortgage requirements took effect in January 2018 with the addition of a stress test, requiring borrowers to qualify under a higher rate,” the report states. “The rule only applies to newly originated mortgages and is designed to prevent borrowers from taking on more debt than they can handle if interest rates go up. Since its passing, buyers’ worries are growing.”
The report said 51 per cent of Canadians say they are concerned that stricter rules will prevent them from qualifying for a mortgage, up five points since 2018.
“Younger home shoppers also feel the weight of the law. Sixty-nine percent of those 18-34 years old are concerned about qualifying for a mortgage under the stricter guidelines,” said Zillow.
Renters, who are also thinking about buying their first home, are also not immune to this worry. Sixty-six per cent express concerns about mortgage qualification under stricter guidelines.