by Brendan Perry, Mortgage Professional 604.931.4719
An example of the new mortgage stress test beginning October 17th.
The most basic policy change will impact buyers with less than 20% down (high-ratio borrowers). Currently, those borrowers can qualify based on a bank’s 5-year fixed rate. The new rules, however, will require borrowers to qualify on the Canadian benchmark rate, which is currently 4.64%. This will significantly limit a borrower’s buying power.
Current Qualification
Annual Income $100,000
Down Payment $42,500
Qualifying Rate 2.39%
Maximum Mortgage $617,500
Purchase Price $660,000
New Qualification
Annual Income $100,000
Down Payment $42,500
Qualifying Rate 4.64% (stress test)
Maximum Mortgage $487,500
Purchase Price $530,000
This may impact your borrowing capability by $130,000 - it may be important for you to get your pre-approval done before the new rules are implemented. Contact Brendan - details above.
*All figures should be taken as estimates until credit, income, and employment verification is completed.
