New mortgage regulations announced in the first week of October 2016, will come in to effect from today.
We have been experiencing unprecendented low interest rates for a few years and as precaution the government has introduced a “stress test.” What does this mean:
- Current interest rates are in the range of 2.34 – 3.99%. All applicants applying for mortgage financing from today will need to qualify at a higher rate, which is also referred to as the benchmark rate of 4.64%.
- Qualifying at the benchmark rate will safeguard borrowers from financial struggles and deferred mortgage payments, in the event of a future rate increase.
- This also means that the amount of house a borrower can afford will decrease.
Please contact the team at MiMortgage.ca, if you have any questions or require any clarification.