Changes to Stress Test – June 1st Onwards

May 26, 2021

Recently, there has been approved changes to the stress test released by the government that come into effect on June 1st. The Bank of Canada benchmark qualifying rate will increase from 4.79%  to 5.25%.

The changes will be for all mortgages.  This includes; 

  • Insured mortgages
  • Insurable mortgages
  • Uninsurable mortgages

When looking at borrowing power, these changes will create a 5% decrease in borrowing power. This would amount to $5,000 less for every $100,000 borrow.

Unfortunately, pre-approvals will not be grandfathered.  This means that clients must have an accepted offer prior to June 1st to qualify under the previous rate of 4.79%. 

Although this will create a shift in your buying power, it will not be as significant as we have seen in the past. The average Bank of Canada benchmark qualifying rate over the last three decades has been 5.82%.

We will still be working hard to make sure that your mortgage needs are smooth and efficient and plan to still work towards getting you the best rates possible.

If you have any questions about these new measures, feel free to give us a call or email anytime!

Related Posts

Buying Your First Home: What You Should Know

Buying Your First Home Buying your first home for the first time is very exciting, whether it be an apartment, condo, townhouse, or house. It could come at wildly different stages for people. For some, they want to buy a house as their first major purchase, as early...

Bad Credit History (300-574): What To Do?

Bad Credit History Approval this, approval that, the big words we all want to hear, but lately, we are hearing a lot of inflation, high interest rates, tough approval terms, student debt soaring, reverse mortgages increasing to pay off homes, and more money issues....

Popularity of Reverse Mortgages in 2023

Reverse Mortgages Ok let’s be real, you are probably tired of hearing about mortgage rates going up and what the options are for you when you purchase a home. It can look daunting and it can lead people to seek extra income sources or go for a lower valued house then...