With the new mortgage rules coming into effect across Canada, many homebuyers are wondering what it means for them, and whether they can still enter the market at all. One of the new rules applies a stress test to borrowers, which means they need to qualify at a higher rate when they have less than 20 percent as a down payment. Before these new rules, mortgage borrowers who took a 5-year fixed-rate mortgage only had to qualify for the mortgage payment based on the interest rate they were getting. For example, if the current 5-year fixed-rate mortgage is at an interest rate of around 2.34 percent, their qualifying payment would be based on that. Now, with the new rules, that same borrower would have to qualify for a rate at the Bank of Canada’s 5-year fixed posted rate, which is currently 4.64 percent.Read more...
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