James A. and Marcella S. are a young couple living in Nanaimo, B.C. In January they reached out to a mortgage broker after saving a down payment to purchase a home. They are first time homebuyers and between the two of them they earn $80,000 a year. Taking into account student loan payments and a vehicle loan payment, they could afford to purchase a home for $360,000 in the Nanaimo area under the former mortgage rules. But now they can only afford a $315,000 home since they must qualify at 4.64 per cent, instead of 2.79 per cent for the five-year fixed amortized over 25 years.

The couple were in tears to learn about their situation. They have three children and have been saving for more than five years. They can’t possibly find a house in Nanaimo for $315,000 that will fit all of their needs. They were encouraged to reach out to a parents for help with the down payment, but they have no one to help them.