The Mortgage Stress Test Rules Have Changed!
-Over the last few months, the Office of the Superintendant of Financial Institutions had proposed to raise the current
“Mortgage Stress Test” from 4.79% to 5.25% (or two percentage points above the market rate – whichever is higher).
-This was only supposed to impact purchasers buying with 20% down or more. As of yesterday, June 1st, all borrowers regardless of the down payment amount now have to qualify at this higher rate.
-This will result in an average reduction of 4.2% in purchasing power for buyers. At a time when affordability is already a major issue for many first-time home buyers, do you agree with this change? Will this help to cool down the housing market?