While the full effects of this hike will take time to manifest, however, Toronto realtor Desmond Brown said that similar adjustments in other leading banks will instead lead to a chilling effect on market activity.
“We're seeing a bit of softening right now,” Brown told CBC News
. “It's a good time to buy.”
Brown noted that in the weeks since the new federal rules took effect, a greater proportion of conditional offers are now getting accepted, while the number of multiple offers in the market is declining.
A contributing factor to the slowdown, Brown added, is a crucial report from the Canada Mortgage and Housing Corporation that provided strong evidence of “overvaluation” in Toronto and several other major housing markets
On the other hand, Dominion Lending Centres broker Jason Georgopoulos stated that most homeowners in Toronto would be able to cope with the increase, but the increase in monthly costs due to the rate hike would prove troublesome for financially struggling borrowers.
Georgopoulos advised a wait-and-see approach to upcoming developments, which would either be TD reverting to a lower rate or major banks following TD’s lead in increasing rates.
“We'll probably know within the next few days. I've seen it happen both ways.”
First of many changes to come?
New rules rife with risks - housing critic
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In the wake of the new federal mortgage rules that took effect last month, TD Bank raised its Mortgage Prime rate for variable mortgages by 0.15 points (up to 2.85 per cent) on November 1.