New stress test for conventional mortgages
October 17, 2017 | Posted by: Natalie Wellings
Current mortgage rules state that borrowers who put more than 20% down on a home DO NOT have to qualify for a mortgage with a stress test.
The stress test ensures that borrowers qualify for the mortgage at a much higher rate using the Bank of Canada benchmark as a guide. The current stress test qualifying rate is 4.89%.
Starting on January 1st 2018 ALL borrowers will have to pass the stress test to qualify for a mortgage, regardless of the size of your down payment.
This is a big change that will affect all mortgages WITHOUT default insurance.
The vast majority of first time buyers have less than 20% down and have been qualifying with the stress test for months so itâ€™s not a big deal. However, if you were planning on buying a property with 20% down, or more, you will need to get in touch with your mortgage professional to find out how much this new rule will impact you. Read more HERE.
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