The Bank of Canada raised its mortgage qualifying rate to 5.34 per cent this week, meaning borrowers now face a higher bar in the federally mandated stress test. The rate was previously 5.14 per cent.
The qualifying rate, different from actual rates offered by lenders, is used as a benchmark to determine borrower eligibility. The rate is up from 4.64 per cent this time last year.
Borrowers with less than a 20 per cent down payment seeking mortgage insurance have to qualify at the Bank of Canada benchmark rate. Effective this past January, borrowers who don’t need mortgage insurance must prove they could handle either the Bank of Canada rate or two percentage points higher than their contractual mortgage rate, whichever rate is greater.
Mini Buyer's Consultation :
https://www.youtube.com/watch?v=uK2zUHGuXrc&t=24s
The qualifying rate, different from actual rates offered by lenders, is used as a benchmark to determine borrower eligibility. The rate is up from 4.64 per cent this time last year.
Borrowers with less than a 20 per cent down payment seeking mortgage insurance have to qualify at the Bank of Canada benchmark rate. Effective this past January, borrowers who don’t need mortgage insurance must prove they could handle either the Bank of Canada rate or two percentage points higher than their contractual mortgage rate, whichever rate is greater.
Mini Buyer's Consultation :
https://www.youtube.com/watch?v=uK2zUHGuXrc&t=24s
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