Monday, October 3, 2016
new mortgage rules in Ottaw
The Federal Government has announced yet another important mortgage rule change in efforts to cool the housing market by implementing what they call a "stress test".
In other words qualifying for a mortgage just got a whole lot more difficult.
Effective October 17th all insured mortgages are required to QUALIFY for their mortgage using the current Bank Of Canada Benchmark rate of 4.64% compared to using the ACTUAL rate that currently ranges from 2.39% - 2.44%.
Anyone that is currently in the market to purchase a home or refinance a mortgage but have not yet made an offer or committed a live mortgage needs to RE-QUALIFY immediately.
UNDERSTANDING THE NUMBERS
Let's put this new rule into perspective......
A couple with a $100,000 income, no debts and 5% down payment can currently qualify for about a $484,000 home purchase using the current 5 year fixed rate of 2.44%
That same couple having to qualify at the bench mark rate of 4.64% now qualifies for a $421,456 home.
That is $62,544 less buying power!
All in effect by Oct 17th