05/25/2021
As of June 1st, the federal government has increased the current mortgage stress test rules for all new mortgage applications, regardless of the amount of downpayment. Borrowers will need to prove they can afford payments based on the higher of the contract rate plus 𝟮%, or a new floor rate of 𝟱.𝟮𝟱%, up from the current 𝟰.𝟳𝟵%.
“The recent and rapid rise in housing prices is squeezing middle-class Canadians across the entire country and raises concerns about the stability of the overall market,” Finance Minister Chrystia Freeland said in a statement accompanying the announcement from the government.
In a statement released by the Mortgages Professionals Canada yesterday, “the rapid rise in prices making qualification more stringent now will disqualify many of the Canadians the government has promised to support. Since the First Time Home Buyers Incentive program also requires an insured mortgage qualification for borrowers to be eligible, the existence of this program, even with the increased limits, will do nothing to help these newly disqualified buyers.”
If you are planning to buy a home in 𝟮𝟬𝟮𝟭, please reach out to us to ensure you are pre-approved based on these new guidelines.
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