Concerned About the New Mortgage Changes?
Monday, October 17th, 2016
Over the last week, we have spoken with a few of our mortgage specialists to gain a better understanding of how the mortgage changes may affect you. Due to the updates, a homebuyer may not qualify for as high of a mortgage as they previously could.
Now “the average home buyer will have to pass a financial stress test and qualify for the 4.64% interest rate which is about 2% over the rate they are qualifying for right now.” Suzette Hawkes from RBC explains that “this test measures whether the buyer can still afford to make payments if the mortgage rates rose to the Bank of Canada’s posted five-year fixed mortgage rate. In some cases, this means homebuyers will be able to spend $20,000.00 less on a home that they were originally pre-approved for on a prior date.”
Homebuyers that are applying for a conventional mortgage with 20% or more down will not be affected by this change. For the home buyers that require an insured mortgage (less than 20% down) will have to go through this process.
Our recommendation: be sure to talk to a mortgage specialist to learn more about your current buying power.
