Changes to the stress test announced!
February 18, 2020 | Posted by: Natalie Wellings
After mounting pressure to adjust the onerous stress test, federal Finance Minister Bill Morneau, announced a relaxing of the overly stringent test which has made qualifying for a mortgage difficult in recent years.
The current rule has borrowers qualifying at the Bank of Canada benchmark rate which currently sits at 5.19%. Under the new rules, the qualifying rate will be the weekly median 5-year fixed insured mortgage rate plus 2.00%. As an example, if the median weekly 5-year interest rate is 2.79% then the qualifying interest rate would be 4.79%.
On a $100,000 mortgage the difference between 5.19% and 4.79% is $22.76/month.
The change comes into effect on April 6th.
If you have questions about this new change please contact me!