The country's latest mortgage rules have come under fire yet again. The Toronto Real Estate Board (TREB) is calling for a review of the mortgage stress test that it said is hampering sales. This comes in the wake of continual falling sales with the Toronto area seeing its biggest decline in real estate sales in years last month.
TREB has indicated that sales dropped nearly 8 per cent -- the largest decline since last February -- and blames the stress test for some of the market's woes. Would-be purchasers have to pass a mortgage stress test where they have to qualify for a mortgage at the Bank of Canada's current interest rate plus an additional 2 per cent in order to qualify for a mortgage even if they are able to secure a loan at a lower interest rate. This test has many purchasers and realtors up in arms not only in the Toronto area, but across the country.
The board suggested that not only should the test be reviewed, but federally-insured mortgages should have amortization periods of 30 years to make it financially easier for purchasers. TREB said that further declines in sales could hit the overall economy with a mean punch. Billions of dollars in lost revenue, TREB added, could impact other areas -- including employment.
The real estate industry is a volatile one. Toronto residents who are thinking of venturing into real estate dealings would benefit from the experience of a real estate lawyer. A client's best interests are always in the forefront when working with a lawyer experienced in real estate law. In an industry where the rules can change often, getting a lawyer's advice could mean the difference in a deal going smoothly or going sideways.