Market News

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.

What this means for your mortgage

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.

REALTOR® honoured for work with at-risk youth

The Real Estate Board of Greater Vancouver (REBGV) honoured REALTOR® John Patricelli with the 2017 REALTORS Care® Award for his dedication to helping at-risk youth.

The REALTORS Care® Award is presented annually to Realtors in Metro Vancouver who demonstrate a sustained commitment to charitable, fundraising, or volunteer activities that strengthen communities and support people most in need.

West Vancouver REALTOR® awarded profession’s highest honour

The Real Estate Board of Greater Vancouver (REBGV) honoured REALTOR® and real estate broker Calvin Lindberg with the Professional Excellence Award on April 6. The award is REBGV’s highest honour. 

Lindberg is the Managing Broker at Angell Hasman Realty in West Vancouver.

Fewer home sales and listings in the first quarter of 2018

Home buyers and sellers were less active in Metro Vancouver* throughout the first quarter of 2018. 

Real estate board instates Phil Moore as 2018/2019 president

The Real Estate Board of Greater Vancouver (REBGV) would like to introduce REALTOR® Phil Moore as its 2018/2019 president.

Commercial real estate sales down, values up in 2017

Commercial real estate sales activity in the Lower Mainland declined from the record highs of one year ago and remained above the region’s long-term historical sales average in 2017.

Source: https://www.rebgv.org/news-statistics