May 31 2021
During the month of May, the OFSI announced its decision to tighten the rules for the Canadian mortgage ‘stress test’ in response to rising home prices over this last year. Effective June 1, the minimum qualifying rate for an uninsured mortgage will be the greater of the mortgage rate plus 2% or 5.25%. Check out these articles to learn more about how these new rules will affect Canadian home buyers.
The new mortgage stress test rules are expected to reduce purchasing power by approximately 5%. However, National Bank Financial analysts stated that they do not expect this to significantly impact lenders' underwriting decisions.
The proposed mortgage stress test rules coming into effect on June 1 are intended to rebalance the market, address the concern of limited supply coupled with rising home prices, and protect Canadians if interest rates go back up.
Our CEO & Co-Founder Jesse Abrams discusses how our team at Homewise has seen an influx of applications from first-time buyers looking to get into the housing market. With many of us working from home for the foreseeable future, there’s a renewed appreciation for homeownership among this group of individuals.
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