Re/Max Realty Specialists Inc.,
Brokerage Independently Owned & Operated
*Sales Representative

Blog by Krisztina Neglia

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New Mortgage Rules- 2018

New Mortgage Rules are now in affect. As of January 1st, 2018, buyers with a down payment of 20 percent or more will also have to qualify at a rate of 2% higher than the mortgage rate they qualified for or the Bank Of Canada's 5 year benchmark rate (currently 4.99%). Whether you are getting, renewing or refinancing a mortgage you must pass this stress test.

The actual mortgage payment will still be paid at the negoiated interest rate, but a higher calculation will be used for qualification purposes. To put this into perspective according to RateHub.ca's mortgage affordability calculator, a family with an annual income of $100,000 with a 20% down payment at a five year fixed rate of 2.83% amortized over 25 years can currently afford a home worth $726,939

Under New Rules they will need to qualify at 4.89% interest rate

They can now afford $570,970 

A Difference of $155,969 (less 21.45%)