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Recent Changes to our Mortgage Rules

Posted by Greg Syrota on March 5, 2018

What’s New with Mortgage Rules



Mortgage rules are always changing, and we want to get the latest information to you so that you can make knowledgable decisions when it comes to financing your home.

As of January 1st, 2018, home buyers looking for an uninsured mortgage (money borrowed with greater than 20% downpayment), from federally regulated lenders must successfully pass a “stress test” in order to ensure that borrowers can continue to pay their mortgage, should rates become higher than they are today.   The minimum qualifying rate will be the greater of the Bank of Canada’s rate for a 5-year conventional mortgage (currently 5.14%) or the borrower’s contractual rate plus two additional percentage points (i.e. if the rate is 4%, the borrower must qualify for approval of the same mortgage if the rate was 6%).  

Prior to January 1st, only insured mortgages (homes purchased with less than 20% down) required a stress test, however the Office of the Superintendent of Financial Institutions (OSFI) announced last year that with increasing home prices and low interest rates, this step is necessary to address risks foreseen from these factors along with high household debt.

These new rules may affect home owners that are looking to renew or refinance their mortgage since the stress test came into effect.

Have questions?  Get in touch and we would be happy to put you in touch with a qualified mortgage lender that can help walk you through the changes and what steps you need to take to qualify for your dream home or property in South Georgian Bay.

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