Mortgage Stress Test Will Challenge First Time Home Buyers
15th Nov 2016
The federal government implemented a more stringent mortgage stress test for new mortgages on October 3rd, 2016. The mortgage stress test will be a challenge for new home buyers.
Low interest rates have created several hot markets across Canada. Concerns about housing affordability have moved the government to make rule changes to support the long-term housing stability.
Vertuity Mortgage, the leading mortgage broker in Winnipeg, is helping clients understand and manage the new mortgage stress test.
All banks and mortgage brokers have to use new procedures in order to qualify a client for a mortgage. The new rule change requires all new mortgage applicants to pass a mortgage rate stress test for insured mortgages regardless of the amount of a down payment. The test determines whether a buyer can afford to make payments if mortgage rates rise to the Bank of Canada’s posted five-year fixed mortgage rate.
The Bank of Canada’s rate is often significantly higher. The Bank of Canada rate is currently 4.64%. The current 5-year fixed rate mortgage is around 2.44%.
First-time home buyers may have a challenge to face as buying power has been reduced by nearly 20%.
Vertuity Mortgage is prepared to explain how the new mortgage stress test may affect you and your new mortgage. By using a mortgage broker you will have more options.
As a top mortgage broker in Winnipeg, Vertuity Mortgage has access to over 40 different lenders and typically works with 5-10 lenders to meet a client’s needs. Vertuity is a local company but is part of a national mortgage franchise that creates great “buying power”.
Contact Vertuity Mortgage for a personal consultation and learn how we can help you navigate the changing mortgage marketplace.