Canadians saw their buying power increase last week when the central bank’s rate fell for the third time this year to 4.79% (from 4.94%), easing a key stress test faced by borrowers.
While most borrowers do not pay anything close to the benchmark posted rate for a mortgage, the rate is used when assessing borrowers as part of a financial stress test.
With this move you’ll be able to qualify for just a little more than you could before.
A family with an annual income of $100,000 and a 10% down payment would have qualified for a home valued at $523,410 under the 4.94% qualifying rate. Under the new qualifying rate of 4.79%, they can now afford $531,230.
If you’d like to know what impact this drop has made on your qualification, please give me us a call.