The big news out of Ottawa this week saw the federal government taking steps to cool the housing market by introducing a financial stress test to all insured mortgages and closing a tax loophole for foreign real estate buyers.

Starting October 17th all home buyers must qualify at the bank’s posted rate, or the Bank of Canada’s posted rate (currently 4.64%), whichever is higher. This so-called stress test already applies to variable rate mortgages or mortgages with terms of less than five years.

First-time home buyers are expected to feel the biggest impact from these new mortgage rules as it will affect the maximum amount they can afford to spend on a home. Canadians with existing mortgages will not be affected by these changes when it comes time to renew their term.

Has Ottawa brought this country’s housing fantasy to its knees?

This Week’s Recap:

On Monday I wrote about making rational vs. behavioural driven financial decisions.

On Wednesday Marie explained why she has been a dividend investor since the early 1990s.

And on Friday I reviewed Scotia iTRADE U and its educational tools for self-directed investors.

Weekend Reading:

Rob Carrick has been touring college campuses in eastern Canada and found today’s youth to be slightly obsessed with their credit scores. Carrick says if you’re obsessive about your credit score, you’ve got it all wrong.

Jeff Rose says your new car payment is the one monthly payment that’s killing your wealth.

Mark Seed explains how to save (and splurge) on your family vacation.

Dear younger me: What money advice would you give to your younger self?

Tangerine is giving away a free copy of David Chilton’s The Wealthy Barber Returns eBook.

Kerry Taylor is On The Money with CBC and here she explains how to plan ahead and save for your child’s education:

Preet Banerjee explains the difference between three types of RESPs; the individual and family plans you can get from your bank or credit union, and the group plans sold by scholarship dealers.

Lessons from the Dragons: A look at how online comparison site RateHub attracted a flurry of offers from the Dragons. Here’s another take on why RateHub turned down $1M for a 7% stake in its business.

Is the latte factor really making people poor? Nelson Smith argues that it’s the big decisions – housing, cars, careers – that impact our finances the most.

This report focuses on finding solutions for food waste in Canada.

Why are we still using cash? The Freakonomics Radio podcast explores why the U.S. is printing more cash while other countries are doing away with it.

The mutual fund industry is blowing all kinds of smoke over proposed banning of trailer fees. Douglas Cumming, who co-authored a study that showed how trailer fees influence fund flows, shares the facts on why fees harm investors:

“At the risk of making an analogy to the cigarette industry and early denial of the harm caused by cigarettes, I hope we stop blowing smoke and make use of the information and data provided by the mutual fund industry that clearly show trailer fees harm Canadian investors.”

Thinking, fast and slow. Daniel Kahneman on brain tricks for better investing.

Michael James finally sold off the last of his individual stocks (shares in Berkshire-Hathaway) and can now say he’s a full-fledged indexer.

Researchers say we need to ‘retrain’ for retirement in order to be ready for life after work. Here are few other ways in which those in their 50s might look to prepare.

Finally, quitting Canada? Here’s how to retire in spring-like paradise in the autumn of your life.

Happy Thanksgiving, and have a great weekend!

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