Starting in 2018, there will be a new minimum qualifying rate in place for homebuyers. Canada’s banking regulator has announced they are applying a new “stress test” to home buyers who don’t need mortgage insurance.
This means you’ll now have to qualify for a mortgage at a higher rate (of 4.89% or more!) even if you have a down payment exceeding 20%, proving you’ll be able to make your payments if interest rates continue to rise.
Many economists are estimating these changes will reduce the amount buyers will be able to afford by 15-20%. What does this mean for you? Well, if you currently qualify for a mortgage of $400,000, you may only qualify for $320,000 as of the new year.
This great video from the National Post explains the changes: “Will you pass the NEW mortgage stress test?”
But you don’t have to stress about it! If you buy a home now and have a firm mortgage approval in place before January 1, 2018, then the old rules still apply. Now is the time to pick your perfect pad at INK and we’ll help you get a pre-construction mortgage approval too!
Call or text 403 862 6421 or email renee@battistella.ca for more INK information.
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