Canada’s federal banking regulator announced that the mortgage stress test rules will be stricter starting on June 1, 2021. These changes will help to slow down a fast-moving housing market as well as ensure that homeowners will be able to afford their mortgage payments, even in the event of an increase in interest rates.
The mortgage stress test was first implemented in 2018 by federal bank regulators. It became a required step in qualifying for a mortgage from a bank. In order to pass the mortgage stress test, a potential borrower must be able to prove that they will be able to afford the mortgage at a pre-determined qualifying rate.
The qualifying rate for uninsured mortgages will increase to 5.25% or the contracted rate plus 2%. This means that potential home buyers will qualify for lower mortgage amounts after June 1 than they would have before the change. Interested borrowers may need to increase their down payment or look for a less expensive house.
According to Kash Toor, CEO of Mortgage Partners Corporation, “The new proposed stress test will require a slightly higher income amount to qualify for the same mortgage, but we continue to provide solutions and options for borrowers which make sense for them.”
Kash and his team at Mortgage Partners Corporation are always looking at creative mortgage solutions to suit their clients’ unique needs. “With equity lending increasing in popularity, we have done several transactions without any qualifications of the debt ratios which typically would affect your borrowing capacity,” he says.
Mortgage Partners Corporation specializes in residential first and second mortgages, renewals, home equity lines of credit, commercial mortgages and private funding solutions. Since they are fully independent, the brokers at Mortgage Partners are able to look at a variety of mortgage options for their clients.
The team at Mortgage Partners Corporation is experienced in all types of changes to the lending climate. They are able to find excellent options that suit their clients’ needs. Kash’s passion for helping people achieve their homeownership and financial goals keeps the team inspired.
Mortgage Partners Corporation now serves 5 communities including Bradford, Richmond Hill, and Vaughan. To find out more about how the upcoming changes to the mortgage stress test rules will affect upcoming mortgage plans, contact the experienced team at Mortgage Partners Corporation. Visit them online at mortgagepartners.com, on Facebook or call them at 1-800-571-4996.