Do you have a financial question that's keeping you up at night? Ever wished you could get a second, or third, opinion on what to do with your money? Here's your chance: Bankrate.ca hosts a monthly feature whereby you submit a question, and we ask industry experts to weigh in. The topics are up to you — you ask the questions, and we'll get the answers.

Here's this month's question: "We've been saving forever to buy a home and we're almost ready. What will the new mortgage rules mean to us as first-time buyers?"

Well, here's hoping you weren't banking on a 30-year term because those days are over.

Ottawa announced new rules in June designed to tighten Canada's mortgage industry and curb the hot market. Changes include:

  • Reducing the maximum amortization period to 25 years from 30 years for those who have a down payment of less than 20 per cent.
  • The maximum people can borrow when refinancing a property is now 80 per cent, down from 85 per cent, of the value their home.
  • Government-backed mortgage insurance will no longer be available on homes that cost more than $1 million. In other words, you need a minimum 20 per cent, or $200,000, down payment.
  • The new gross debt-service limit is 39 per cent, down from 44 per cent.

The rules came into effect July 9. However, a survey conducted by Pollara for Bank of Montreal at the time revealed only about half of those surveyed knew about the changes, despite two-thirds saying they were familiar with the mortgage rules in Canada.

Obviously you're not the only one questioning how these changes will affect future home purchases. Meanwhile, recent stats show the fallout is already being felt.

While sales were steady in July, the average price of a home in Canada was $353,147, down two per cent from the same time last year, according to a report from the Canadian Real Estate Association.

Some experts believe the new rules are already having their desired effect and cooling an overheated market.

Sam Soukas, real estate agent with Re/Max in Toronto
Things have definitely changed, says Soukas who focuses on some of Toronto's hottest neighbourhoods, including Leslieville, Riverdale, East York and the downtown core. Summer is typically slower, but this year it's more noticeable as people adjust to the new rules.

"What we are seeing is a section of the buying population having to wait a lot longer before they get in the market," he says, adding the 30-year amortization was a huge draw for first-time buyers struggling to get a foothold in a thriving market. "Everyone was doing it. Prices got so high so people were just trying to make those payments as low as possible."

Last year a hefty 40 per cent of new mortgages were amortized for 26 to 30 years, according to a survey from the Canadian Association of Accredited Mortgage Professionals.