Here’s how much house you’ll be able to buy with the new mortgage stress test
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.
Today, the Office of the Superintendent of Financial Institutions (OSFI) introduced a new minimum qualifying rate – a.k.a “stress test” – even for uninsured mortgages, which have down payments of 20 per cent or more.
The guidelines will take effect Jan. 1, 2018 and apply to new mortgages as well as mortgage renewal applications if borrowers switch lenders. Financial institutions won’t be obligated to apply the test at mortgage renewal for existing borrowers, although they may choose to do so, OSFI told Global News.
The new guidelines now require federally regulated financial institutions to vet applicants for uninsured mortgages by using a minimum qualifying rate equal to the greater of the Bank of Canada’s five-year benchmark rate (currently 4.89 per cent) or their contractual rate plus 2 percentage points.
Here’s how the rules would play out for a family with $100,000 in annual income, according to numbers provided by Ratehub.ca, a mortgage rates and credit cards comparisons site.
Let’s consider a first scenario in which the family is offered a mortgage rate of 2.83 per cent, which is more than two percentage points below the current Bank of Canada five-year benchmark of 4.89 per cent.
If they were to apply for a mortgage today, with 20 per cent down payment, a five-year fixed mortgage, and a 25-year amortization period, they would be able to afford a home worth $726,939.
If they were to apply for a mortgage on or after Jan. 1, they would be able to afford only $570,970, with a 20 per cent down payment.
Information kindly provided by Global News.
Commercial real estate sales in the Lower Mainland declined in the third quarter (Q3) of 2018 compared to the elevated activity experienced in recent years.
There were 565 commercial real estate sales in the Lower Mainland in Q3 2018, a 19.5 per cent decrease from 702 sales in Q3 2017, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).
Home buyer demand remains below long-term historical averages in the Metro Vancouver* housing market.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales totalled 1,608 in the region in November 2018, a 42.5 per cent decrease from the 2,795 sales recorded in November 2017, and an 18.2 per cent decrease compared to October 2018 when 1,966 homes sold.
This weekend is the last chance to donate to the 24th annual REALTORS Care® Blanket Drive.
The Blanket Drive is the largest and longest running program of its kind in the Lower Mainland. Over 150 real estate offices are serving as donation drop-off centres during this year’s program.
Today marks the beginning of the 24th annual REALTORS Care® Blanket Drive – the largest and longest running program of its kind in the Lower Mainland.
Realtors across the region are working with their clients to coordinate thousands of donations of blankets, sleeping bags, warm winter clothing, and new socks and underwear for those in need.
The 24th annual REALTORS Care® Blanket Drive kicks off November 13 to collect warm winter clothing for those in need across the Lower Mainland.
The REALTORS Care® Blanket Drive is the largest and longest running blanket drive in the Lower Mainland.
