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Mortgage “Stress Test” – What do you need to know? | Hot Property Online

February 4, 2019

For people who are not familiar with the mortgage “Stress Test”, this is a new mortgage rule which came into effect in January 2018 and it is designed to ensure that borrowers can afford their mortgage payments even if interest rates increase.

As far as your mortgage is concerned, 2017 will go down in history as one of the most impactful years, thanks primarily to the introduction of Canada’s new mortgage qualification rules. Nevertheless, until you purchase your next property or renew/refinance your existing one, you won’t truly appreciate the impact. Here are the facts that you should know about the Canada’s new B-20 Guidelines (better known as the new “Stress Test”) and how it will impact your next mortgage.


Your buying/borrowing power is reduced significantly


In the fall of 2017, the federal government announced additional mortgage qualification rules. Simply explained, lenders now need to qualify you at the greater of the Bank of Canada’s five-year benchmark rate, currently 5.19% (will vary based on when you are looking for your next mortgage) or a rate 2% higher than the rate offered to you. The new rules remove 18% of your buying/refinancing power – if you qualified for a $600,000 mortgage last year, you would only qualify for $488,000 mortgage (a decrease of $112,000) today.


The new “Stress Test” impacts everyone


Most people (including media) have interpreted that the “Stress Test” only applies to first time home buyers and “move-up” purchasers, which is not totally true. In reality, no matter what you need your mortgage for – first time home purchase, moving to a larger home, refinancing or renewing, you will be affected by the new “Stress Test.”


Call MonsterMortgage.ca and let us help you to relieve the stress


This year will be a challenging year for both home buyers and existing homeowners who are looking for a mortgage, if …

Let MonsterMortgage.ca walk you through how the new “Stress Test” will impact your next mortgage. For the last 20 years we have provided Canadians with trusted advice and solutions that has helped them keep more money in their pockets so they can live the life they have earned. To learn how you can start living your “monster life”, call us at (416)480-0234 or send us an email at info@monstermortgage.ca


We look forward to earning your business.