Mortgage stress test means new rules for Battlefords home buyers
Battlefords home buyers may need to plan ahead to ensure they meet the stiffer requirements for purchasing the home they have their eye on as a result of Canada’s new mortgage stress test that went into effect on Jan. 1. There is also the potential that the new test may have a downward impact on house prices in the near future.
“There will be some impact, but I don’t think it is going to be as great as people are worrying about,” said North Battleford RBC Royal Bank mortgage specialist Dean Dimmick. “The stress test essentially means people are going to be qualifying at a higher rate.”
The recent changes imposed will mean the minimum qualifying rate will be higher for uninsured mortgages – mortgages where the borrower pays at least 20 per cent down-payment.
Home purchasers are now required to meet the minimum qualifying rate for uninsured mortgages to be the greater than the Bank of Canada five-year benchmark rate (now set at 4.89 per cent), or two per cent higher than the contractual mortgage rate.