The rumors are true — new rules for conventional mortgages have been passed, effective January 1, 2018.
Global News explains, “Canada’s banking regulator introduced new rules on Tuesday that extend the requirement for a mortgage stress test to all homebuyers, including those with larger down payments. Currently, the stress test applies only to mortgages with lower down payments and those with a term of less than five years.” The newly introduced minimum qualifying rate will now include uninsured mortgages, with down payments of 20 per cent or more.
Simply put, these rules will reduce your purchasing power by 20 per cent, regardless of your down payment! That means if you’re currently qualifying for $500,000 under the existing rules, you’ll only qualify for a $400,000 purchase price come the new year.
If you’ve been shopping around, make sure you get your mortgage pre-approved before January 1, 2018.
Want more info? Contact anyone on our sales team who is more than willing to help.