Posted on August 17, 2020 in Uncategorised

Canada’s mortgage stress test rate drops, third time since pandemic began

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.

Example:
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.