Millennial first home buyers feel impact of new mortgage rules

One millennial says new rules have made buying a home "impossible right now"

Millennial first home buyers feel impact of new mortgage rules
Duffie Osental

Stricter mortgage lending rules meant to cool the country’s red hot housing market took effect this week – but some millennial first home buyers say that the changes have made it more difficult to buy a home.

In a recent CTV News report, 21-year-old Connor Stroh said that the new mortgage stress test – which increased the qualifying rate to 5.25% from 4.79% -- has made entering the housing market as a first home buyer “impossible right now.”

Read more: The implications of generational wealth on the mortgage market

“The down payment was scary enough as it is, but now the stress test being raised makes it even harder,” Stroh, a graduating university student, told CTV. “I am either going to have to go to the bank of mom and dad for help or find a couple of co-signers. It’s definitely intimidating. I still have a couple of years to go, but I hope it’s not too hard.”

Polls show that an increasing number of millennials in Canada are already in financial despair from mounting personal debt and stagnant salaries, making buying a home unattainable for many in the age group.

“I know some people who are tens of thousands of dollars in [student] debt,” Stroh told CTV News. “The opportunities are very few and far between to earn an income at my age.”

And according to Tracy Valko, a mortgage broker in Kitchener, ON, the new rules don’t address the larger issue of housing supply.

“The real issue here is the supply,” Valko told CTV News. “We’ve got a lack of supply.”

Her advice to first home buyers, however, is to have a financial plan and walk through options with a broker.

“My advice is to stay positive and make sure you are speaking to a mortgage professional about where you’re financing is at,” she said.