Edmonton Mortgage Blog
Your Edmonton Mortgage Broker: Natalie Wellings
Changes to the stress test June 1st 2021
May 28, 2021 | Posted by: Natalie Wellings
The real estate market has been incredibly busy this year with a hot real estate market and low interest rates which has prompted many to buy a new property or refinance their existing mortgage. Lenders, Mortgage Brokers, and underwriting departments are working at full capacity to ensure deals are processed in a timely manner but it has definitely been a challenge for the industry as we are dealing with unprecedented volumes!
In the midst of these crazy times, an announcement was made last week by both the Office of the Superintendent of Financial Institutions Canada and the Department of Finance that the Stress Test rate will be increasing. This change will impact Uninsured and Insured mortgages, with the change taking place on June 1st. I’m seeing all sorts of different things on social media over the last week so I wanted to let the dust settle and get some clarification before reaching out.
On June 1st the stress test rate (the rate which a borrower must qualify at) will rise to 5.25%, or the interest rate plus 2%, whichever is higher.
What does this mean for you?
We are currently qualifying borrowers at 4.79%. On June 1st this will increase to 5.25% and will reduce your purchasing power by approximately 5%.
