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!