Changes to mortgage stress test just in time for the busy spring home-buying season
We just got some great news recently: the Federal Government is changing the mortgage Stress Test which has been a pain point for consumers, Realtors, and mortgage professionals since 2018.
What the Federal Government has agreed to is to change the Qualifying Rate (which has been the big hurdle for qualification) to about 2% above the average insured rate in Canada. This means that where most Banks are using 5.19% as the Qualifying Rate today, the new Qualifying Rate would be roughly 2.89%. This will make it easier for some homebuyers to qualify for approximately 5% more home.
The good news for business owners is that the Feds are actually addressing housing affordability. With house prices escalating like never before, there is no question we had to adjust the Qualifying Rate.
On the other side of the equation, we are seeing inflation numbers coming up which should put upward pressure on mortgage rates, but most of that is coming from gas prices right now. It seems unlikely to see mortgage rates moving up any time soon which means this Spring Market will position consumers to be able to buy properties and refinance mortgages at some of the lowest rates in Canadian history.
Jethro Seymour is one of the Top Davisville Village Real Estate Brokers and a midtown Toronto residential specialist with over 20 years of sales experience in real estate, marketing, construction and publishing. He has helped many families find homes in Toronto’s great neighbourhoods, and has extensive knowledge of local markets, new home construction, resale home sales, and the condo market. Living in midtown Toronto, Jethro previews many of the homes that come to market for his clients and inventory knowledge. Jethro specializes in Midtown, Davisville Village, and Leaside neighbourhoods.