It’s not just the stress test that new homeowners have to be cognitive of…No more than 39% of income can be allotted to home expenses & the total debt service can not exceed 44% of income…interest rates are at an all-time low; personally agree with the latest changes!!! Some homeowners are currently maxed out, if the rates go up it will potentially bankrupt them!!!

New Mortgage Regulations Making it Harder to Qualify

Starting October 17th all insured mortgages must undergo a “stress test” that ensures a borrower’s ability to make their mortgage payments at a higher interest rate.

When you choose to get a fixed rate mortgage, you qualify at the fixed rate of the term — normally, it’s a 5 year term at 2.49%.

With the changes starting on October 17, you’ll have to qualify at the Bank of Canada rate of 4.64%!!!

Real world example:

If you make $80,000 per year and put 5% down, today you can qualify for $530,000, based on the 5 yr fixed rate of 2.49%.

After October 17th: You will only be able to qualify for $418,000 with the same 5 yr fixed rate of 2.49% — a difference of $112,000 (the difference is a result of the government qualifying you against 4.64%, not 2.49%).