Changes handed down by the Federal Finance Minister will see new regulations in place for those individuals purchasing and qualifying for a home.

The changes brought forward were created to cool hot markets in Toronto and Vancouver, but the effects will be felt in markets outside those areas as well.

Stacey Scott, Mortgage Architects, Licensed Associate, says as of October 17, some home buyers will feel the pinch of the mortgage rate stress test.

"For all insured mortgages (less than 20% down) will now be qualifying at the Bank of Canada benchmark rate which is currently at 4.64, so right now if I was to qualify you at a regular 5 year fixed rate mortgage we would be qualifying on the 2.49% mark, now I will have to qualify you at 4.64 rate."

Scott adds buyers are not paying a higher rate, but you need to qualify for the higher rate.

"That is taking some people out of the market, maybe, first time home buyers coming into the market, or we were just trying to squeak them into a condo or townhouse to get started and it is pushing them back out of the market."

Scott adds while some effects will be felt buy those purchasing higher up homes, the people most impacted will be those trying to break into the market all together.

If you are in the process of buying, as long as your deal is bid and signed off prior to October 17, the new rules will not apply.

Some other changes will be felt  more behind the scenes by mortgage brokers themselves.

"Any mortgages that are insured through portfolio or bulk insurance (mortgages that have more than 20% down, behind the scenes we have purchased insurance on them) we are now going to be following that same criteria of the 4.64% qualifying rate, those will come into effect on November 30. The last rule they put in was more closing the loopholes on the capital gains taxes, that again is more behind the scenes for bigger areas where different type of investors or out of country investors come in, purchase property, and getting away with not paying capital gains as they were selling them off."

Scott says if you are in the process of buying, and these changes affect you, make arrangements to sit down with your lender.

"I would get into contact with your bank or your mortgage agent or whoever you have been working with and I would sit down and make a new plan. If it's not now, what can we do from here so we can put things together so you are still able to purchase. We are trying not to kick people out of the market with these rule changes; but we are trying to adjust files, and work with clients individually."

Rumors are buzzing that some lenders and other insurers may challenge the new legislation by approaching the government to perhaps negotiate or put reason to these changes; but for now, that remains an unknown.