New Mortgage Rules

With the start of a new year, OFSI will be setting a new qualifying rate for mortgages. These changes are being referred to as the controversial “mortgage stress test”, and has been called by The Globe and Mail both a “tide turner” and “the most potent mortgage rule change of all time”. So, why does this concern you?

      Effective January 1st, uninsured mortgages will need to qualify at the Bank of Canada’s 5-year fixed rate, or the contractual rate +2%. Put simply, to afford a home of roughly $500,000 – you must actually be able to afford closer to a $700,000 home in order to qualify for your mortgage. Due to this 20% decrease in affordability, first time homebuyers will be immensely affected. This means in order to get the same bank mortgage you can afford today, you will need to earn an upward of 20% more than your current annual income.

       These rules may also impact your ability to renew or take out money from your home’s equity. This could mean acting quickly and accessing funds before this change is implemented is in your best interest! Customer retention may easily spur from these changes, as some mortgage holders will become trapped at their current bank, no longer being able to pass the stress test with a different lender. This gives leverage for banks to give less than ideal renewal rates, as they know borrowers will not have a choice to switch lenders.

     If any of these changes concern you, we recommend contacting Beverley Brandl of Dominion Lending Centres to help you with anything from renewing into lower rates, home improvements, consolidating debt, and more!


Presented by:
Nadene Milnes & Kristina Tardif
Sales Representatives
Royal Lepage Locations North
The Signature Sold Team

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