26 Jan Here’s How Much House You Can Afford Under Canada’s New Mortgage Rules from @Huffpost
It’s January 2018, prospective homebuyers, and you know what that means: The new mortgage stress test is in play.
But what you may not know is how much it’s going to impact your homebuying budget. Nor would you be alone: A new study from ReMax estimates that 37 per cent of Canadians aren’t aware of how the changes will affect their ability to purchase a property in the future.
If you’re among them, you may be feeling the stress, indeed. But here’s our guide showcasing what you can afford with the new regulations.
Towards the end of 2017, the Office of the Superintendent of Financial Institutions (OSFI) introduced new, tighter mortgage rules, requiring borrowers with uninsured mortgages (those putting a down payment of 20 per cent or more) to undergo a stress test. As of Jan. 1, 2018, uninsured borrowers must now qualify at a new minimum rate — the greater of the Bank of Canada’s five-year benchmark rate, which currently sits at 4.99 per cent, or 200 basis points higher than their mortgage rate.
While the stress test aims at ensuring that borrowers can afford mortgage rate hikes, some sources are questioning — if not outright opposing — the latest mortgage rule.
Fifty-eight per cent of ReMax’s survey respondents are aware of the new rules, but 27 per cent of respondents stated they don’t believe it will impact the type of property they purchase; 18 per cent believe it will impact the property type they purchase; and 13 per cent are unsure of how the new regulations will affect their ability to purchase a property.