Nadia E. was recently transferred from Gatineau, Que. to Miramichi in New Brunswick for a job at the new Federal Payroll Centre. She had purchased a home in Gatineau two years ago with a big bank and had locked in to a five-year term.

She tried porting the mortgage through her bank in order to save her a $9,000 penalty. However, the mortgage rules forced Nadia to qualify her at the five-year posted rate, even though her original term was five years. This significantly reduced her ability to qualify for a home in the neighborhood where she wants her kids to go to school. She is francophone, and there is only one French school in the area and the surrounding neighborhoods have seen some increases in home prices. In order to qualify, she would have to come up with a larger down payment (20 per cent) and re-qualify on a five-year fixed with a 30-year amortization, thus breaking her term. Even with the proceeds of her sale, the $9,000 penalty made it difficult for her to put more than 15 per cent down.

The combination of a high bank penalty and the requalification guidelines has made homeownership in Miramichi very unattractive for her and her family. Nadia is looking at homes in the $175,000 to $200,000 range. Her payment on 25 years at 2.69 per cent would be $900/month. To rent a home that will accommodate her family of four, she would be looking at $1200-$1300 per month in rent, if she is lucky enough to find a landlord that will allow her to bring her two dogs.