The Government approved a reduction in the mortgage stress test qualifying rate for High Ratio mortgages beginning April 6th. This is for High Ratio Mortgages where the borrower is putting down less then 20% and needs mortgage insurance. We do expect the conventional mortgage (non-insured mortgages with 20% or more down payment) stress test which is currently at 5.19% also to follow suit but nothing is official yet.
What this means to the borrower: Currently when qualifying for a mortgage the qualifying rate used is The Bank’s Posted Rate of 5.19%. The Government Department of Finance will use their own weekly Median rate + 2.00%, so today would be around 4.89%, to be implemented on April 6th. The rate will be set each week. So today 4.89% qualifying rate vs the current qualifying rate of 5.19% would add roughly another $15,000.00 to a mortgage so nothing to get overly excited about but could help on a tight approval.
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Residential and Commercial Mortgage Agent
SAFEBRIDGE Financial Group
Broker License #10524
Direct Line | 416-899-1467
Fax | 1866 385-4049
E-mail | email@example.com