Mortgage Stress Test - October 16, 2017
The Canadian Government is discussing adding new qualification standards which all borrowers will have to meet, not just Buyers with less than 20% down. There is a good chance in the New Year you will have to qualify at an interest rate roughly 2% higher than your contract rate and with a 25 year amortization even though your monthly payment will be at the lower interest rate and you can still obtain a 30 year amortization to further bring down monthly payments. This "Stress Test" is designed to ensure borrowers can make their monthly mortgage payments if interest rates go up in the future.
Right now the Bank Rate is 1.25%. The Prime Rate is 3.2%. Average 5 year Fixed term rate is 3.09% and Variable rate is 2.4%.
Lake Okanagan Realty Ltd.
Tel: (250) 870-2792