Mortgage Stress Test Changes Coming June 1, 2021
Mortgage Stress Test Changes Coming June 1, 2021! Starting June 1, 2021, the minimum qualifying rate used for both the insured and uninsured mortgage stress tests will be increasing. What does it mean to you?
Whether you’re making a down payment of less than 20% or more than 20%, you will now have to prove you can afford payments based on your contract rate plus 2%, or 5.25%, whichever is higher. Currently, the minimum qualifying rate is 4.79%.
The changes were announced by the Office of the Superintendent of Financial Institutions and the Department of Finance and will reduce the maximum mortgage you qualify for by between 4-5%. That means if your current maximum mortgage is $400,000, it will fall to $382,400 on June 1 if you’re applying with a federally regulated institution.
Mortgage Stress Test Changes Coming June 1, 2021, while the higher stress test will not apply to your purchase if it was made before June 1 (with a signed purchase to offer).
I always suggest home buyers know their Maximum Mortgage before putting in an offer. and Be aware the different institutions will provide different Maximum Mortgage Amounts based on the individual’s situation. So a Mortgage Agent definitely can help you with the best options for you.
In the first quarter of this year, the real estate market is crazy hot, while I saw some buyers rushed into a bidding war without any idea about the maximum mortgage they can qualify for. It’s a non-necessary careless mistake a home buyer should make. Ask yourself: without knowing the maximum mortgage you can qualify for how can you know your maximum home price you can afford? check on 51qin.ca to get the homes you might like, also check the sold price so you won’t be confused by the low price listing game. or get a free online instant home valuation before listing your current one.
Also, depending on your situation, I do have local lenders that are provincially regulated that still offer products with lower qualifying rates and requirements that may be a fit for your situation.
Feel free to contact me if you have any question about these changes.