How the new mortgage rules could impact Maritimers

New mortgage rules are on the horizon, aimed at helping younger Canadians get into the housing market for the first time.

Becoming a homeowner has been a challenge for many over the last few years and has felt out of reach for some.

"Buyers are frustrated because in a lot of cases they're not happy with what they can get for their pre-approval, and as rates have gone up those preapprovals have gone down and down," said Chandler Haliburton with RE/MAX Nova.

The federal government made an announcement Monday with changes to put first-time homebuyers "in a stronger position."

The government will expand its 30-year amortization to include first-time homebuyers purchasing any type of home, as well as anybody buying a newly built home.

"Now with the amortizations being extended to 30 years, it will allow the same borrower to afford a more expensive home or it will enable some people who were just priced out of the market to get into their first home," said Clinton Wilkins of Clinton Wilkins Mortgage Team.

There could be some added challenges with the changes.

"While it will allow first-time homebuyers to easier access to the market in the short-term, it might have some negative implications long-term to the cost of housing and, in fact, the debt that those first-time homebuyers have to pay back," said Haliburton.

The price cap for insured mortgages will also be boosted for the first time since 2012, moving to $1.5 million from $1 million to allow more people to qualify for a mortgage with less than a 20 per cent down payment.

"That might not have as much of an impact here in Halifax or around Atlantic Canada, but it will impact those first-time homebuyers in Ontario and B.C.," said Wilkins.

He said right now the average price of a house in Halifax is approximately $570,000.

"Which means that a household would need an income of about $125,000 to get into an average home," said Wilkins.

While the new rules are a step in the right direction, Haliburton said more needs to be done.

"Allowing people to spend more money and take on more debt is a double-edged sword to say the least. We need to actually see prices of homes for first-time buyers go down," said Haliburton.

He also said it would have been more impactful if the changes came into effect now rather than waiting until Dec. 15.