Michael and Cassandra S. are a couple with two small children looking to upgrade from their condo into a townhouse in the North Shore.  They live in North Vancouver and would like to remain there due to close proximity to their family and work.

Michael is an accountant and works at Simon Fraser University, earning $90,000 per year. Cassanrda is a graphic designer and works at the local municipality in West Vancouver, earning $60,000 per year.  Both are professionally trained and have been in their respective careers for a number of years.  Furthermore, they both have impeccable credit history; they carry very little debt and they have always paid their mortgage.

They’re looking to upgrade from a condo to a townhouse in their preferred neighbourhood so their kids can attend a good school and be close to their grandparents. Prior to the mortgage rule changes, this couple could have qualified for a purchase price of $1,000,000 with 10 per cent down.  However, their purchasing power has now been reduced to $800,000 since the new rules have come into effect, specifically the rule requiring high ratio mortgages to be qualified at the five-year benchmark rate instead of the contract rate.  Quite simply, this lower purchase price puts them out of the market since no townhouses exist at that price point in their neighbourhood.

It’s not an option for them to move to a different neighbourhood further away, as they rely on their family to help out with the kids while they both work full-time. They have been punished by the new mortgage rules and the result has proved quite dire for them and their entire family.