The government announced new mortgage rules, including a stress test for borrowers last week, effective January 1. The stress test is designed to simulate a borrower's financial situation by assuming they would have to pay back the loan at the posted average — not whatever deal they were able to negotiate. So under OSFI's new rules, borrowers would be stress tested at either the 5-year average posted rate, or 2% higher than their actual mortgage rate — whichever one is higher.
So what does this all mean? Regardless of whether you have 20% down, you will have to qualify for a mortgage under the new stress test. If you are thinking about buying, especially as a new homebuyer, please take these new lending rules into consideration. Unless you have an accepted offer prior to January 1, 2018, this change will indeed affect you.
If you or your family is considering making a purchase in the near future and want more information about these new rules, or how these rules will affect you, give us a call (778-869-8778) or email us. We're here to help!