With effect from October 17, 2016, mortgage loans with less than 20% downpayment are subject to a stress test. These loan applications are now required to qualify at the benchmark rate of 4.64% regardless of the current interest rates.
As of November 30, 2016, to obtain an insured mortgage loan with downpayment of 20% or more, applicants will need to meet the following seven eligibility requirements:
- Mortgage loans for residential properties
- Amortization period of 25 years
- Purchase price of less that $1,000,000
- Variable rate mortgage the loan payment must be recalculate at least every 5 years.
- Must have a minimum credit score of 600
- Debt service guidlines are 39% and 44%
- Must be owner occupied
The new rules are aimed at maintaining affordable home ownership. Contact the team at MiMortgage.ca: We’ll help ensure you make the most of it!