The combination of high interest rates AND the mortgage stress test can make it challenging to qualify for mortgage financing.
What Is the Mortgage Stress Test?
The Canadian Government designed the mortgage stress test to protect borrowers in case interest rates rise. Case in point: The Bank of Canada has raised its benchmark interest rate for the 10th time since March 2022.
To qualify for mortgage financing, you need to pass a stress test, meaning you must prove you can afford payments at a qualifying interest rate which is typically higher than the actual rate in your mortgage contract.
You need to pass this stress test even if you don’t need mortgage loan insurance.
Federally regulated lenders must use the higher interest rate of either:
- 5.25%
- the interest rate you negotiate with your lender plus 2%
If you have an existing mortgage that you want to transfer or port to a new home, you must re-qualify for financing at today’s rates. You also need to pass the stress test if you want to:
- refinance your home
- switch to a new lender
- take out a home equity line of credit
The Government of Canada has developed a calculator to help you determine whether or not you can qualify for a home mortgage based on your income and expenses. You’ll find it here: https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx
Reach out to me any time for intelligent mortgage solutions that open doors!
Please Join Us! We’re Running For Rachael
Sunday, September 24, 2023 | Registration and check in 8:00 am
CF Lime Ridge, Hamilton
Register. Donate. Sponsor. Volunteer. Be a Cheerleader and help us spread the word. You don’t have to be a runner or walker to help!
My husband, Sid and the entire Stacey clan are proud of the significant progress made in advancing the work of suicide prevention in Hamilton, but there is more to do!
Running for Rachael plays a vital role in supporting the city-wide work of suicide prevention by bringing the community together to promote hope (prevention), help (intervention) and healing (postvention) through crisis support information, training, education and support groups.
Suicide prevention is everyone’s responsibility.
Running for Rachael is brought to you by the Suicide Prevention Community Council of Hamilton Registered Charity #83552155ORR0001
Back to School Already? Look at the Smiles!
