VANCOUVER -- The Canadian real estate market has been red hot during the pandemic, and because of concerns that home buyers may be pushing their mortgage budgets too far, a new mortgage stress test has been put in place.

The rules came into effect on June 1, and the test is used to see if you can withstand increases in mortgage interest rates, and whether or not you’ll qualify to buy a new home.

Rob McLister with Rates.ca says this has made it tougher for some Canadians to buy a home.

“It gets harder to qualify for a mortgage for most people,” he says.

If you qualified under the old rate of 4.79 per cent to borrow $500,000, the new rate of 5.25 per cent reduces your borrowing power to $479,000.

"So that increase in the minimum qualifying rate of .46 percentage points is going to make it harder for people to get a mortgage for those who have a higher debt to income ratio," McLister says.

Leah Zlatkin with Brite Mortgage says some of her clients were scrambling to find a home the weekend before the test kicked in.

“The purpose of the stress test is to make sure people can afford things if interest rates go up,” she says. “I also did see a lot of clients reach out to get pre-approved before the rules came into effect.”

The change could have a big impact on first-time buyers who may not be able to compete in bidding wars because they’ll have almost five per cent less buying power.

“I do think there are a number of Canadians who are saying ‘Let’s see if the stress and those qualifying slows down,’ and maybe some of the prices will come with it,” says Pattie Lovett-Reid, CTV’s chief financial commentator.

And there are already signs the market is cooling. The Canadian Real Estate Association reported the number of homes changing hands fell 12 per cent from March to April.

With files from CTV News Toronto's Pat Foran