WHAT DO NEW MORTGAGE RULES MEAN
Sunday Dec 03rd, 2017Share
As of January 1st, 2018, new mortgage rules introduced by the Office of Superintendent of Financial Institutions (OSFI) will come into effect. All new mortgages will be subject to a new minimum qualifying rate or "Stress Test"
WHAT DOES THIS MEAN?
All new mortgage applications, regardless of down payment, will need to qualify either at a rate to 2% higher than the rate being offered, or at the current posted Band of Canada, whichever is higher.
FOR EXAMPLE: If a buyer is offered a rate of 2.75% for a 5 - year fixed rate mortgage, they will still need to qualify at 4.99% because that is the current posted Bank of Canada rate.
WHAT YOU NEED TO KNOW
Whether you have purchased a pre-construction or currently looking and have qualified for a pre-approval mortgage, it's important to remember that a pre-approval is not the same as a firm approval. A firm approval passed as of January 1, 2018, will be subject to new qualifying rules, and there is a chance you may no longer qualify for the mortgage. Please do not leave your purchase at risk.
ITS HIGHLY RECOMMENDED YOU SPEAK WITH YOUR MORTGAGE BROKER AND SECURE A FIRM MORTGAGE APPROVAL BY DECEMBER 31, 2017.