Fabio K. and Shri G. live in Surrey and have been trying to buy a home since the spring of 2016. They want to buy a rancher-style home, not a condo or a townhouse. They are new to Canada; he arrived April 2014 and she arrived October 2012. They both have jobs with a combined income of $69,640.
In April 2016 the couple provided all the regular paperwork required for a mortgage application including job letters, proof of income and down payment, as well as copies of their permanent residency cards. Fabio and Shri could not find anything in their price range and had to wait it out for the market to cool. The market slowed after the B.C. provincial government introduced a 15 per cent tax for foreign purchasers, but prices have remained high. There is still nothing available, especially because they qualify for a smaller mortgage since the federal government changed the rules.
Based on a current rate of 2.69 per cent, five-year term and 25-year amortization, in the spring they would have qualified for a $408,000 purchase, with five per cent down. Based on a current rate, now they qualify for about $74,800 less than they did prior to the changes to the mortgage rules, or just about a 19 per cent drop in purchasing power. Now with the increase in the CMHC Premiums what they qualify for drops even further.
Fabio and Shri are honest, hard-working individuals who have the dream of home ownership. That dream is way off now as there is not a hope that they can purchase a single-family dwelling anywhere from Pemberton to Chilliwack or beyond for a purchase price of $329,000.