NOW IS THE TIME TO MAKE A MOVE BEFORE JANUARY 1, 2018. 20% of applicants will no longer qualify.
Attention Home Owners and Hopeful Home Buyers!
New mortgage rules are coming into play on January 1, 2018 that will impact current mortgage holders and home buyers with more than 20% down. In October of 2016 the Federal government rolled out the “stress test” which impacts mortgage qualification for high ratio buyers or those with less than 20% down payment. In essence the “stress test” makes applicants qualify at a benchmark rate of 4.84% regardless of the contract rate of their mortgage in an attempt to ensure that the borrower can handle interest rate increases. This rule will now also apply to uninsured mortgages for refinances and home buyers with more than 20% down.
The impact will be a decrease in borrowing power of about 20% for all applicants. To offer an example, if a family qualifies today to buy a home worth $900,000 with 20% down payment, as of January 1st their purchasing power will drop to a home worth approximately $720,000.
While the new rules are being put in place to ensure home buyers are not overextending themselves, the result is a limitation on how much Canadians can borrow against their homes. If you are considering a home purchase or a refinance CALL ME TODAY. Applications submitted prior to December 31st will be grandfathered so do not delay if you are looking to refinance or buy a home with more than 20% down. For a Free Market Evaluation or list of mortgage brokers........CAll me today. 604 530-4141