New Mortgage Rules – Stress Test
On October 17, the Office of the Superintendent of Financial Institutions (OSFI) announced changes to mortgage rules. These rules will be in effect January 1, 2018.
In the past, if you had a 20% down payment, your 5-year contract rate would be used to determine your maximum mortgage.
The new rule is as follows: You will now have to qualify for your mortgage with the Bank of Canada’s 5-year Posted Mortgage rate (currently 4.89%), unless your contract rate + 2% is higher, then that will be used to determine your maximum mortgage loan.
However, you do not have to pay this higher rate, but you must qualify at the higher rate to show that you can afford the mortgage payments, even if rates were to increase to the higher amounts above.
If you have any questions or concerns regarding this new mortgage rule, please contact me at firstname.lastname@example.org, or call 1-866-822-9992 and we will be happy to connect you with the right person!
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