Lets talk about the "New Mortgage Rules" that took affect January 1st, 2018. (make sure you read to the end)
You may have already heard about the "Stress Test" rate our federal government introduced in late 2016 for "Insured Mortgages", or mortgages with less than 20% equity/down payment. This rule required mortgage lenders to qualify ALL borrowers with less than 20% down payment using a much higher (about 2% higher than actual) "stress test" rate. The borrower still gets the lower current rate(s), But using a higher rate to qualify them reduced their borrowing power, the mortgage they could qualify for by almost 20%.
Now the federal government in it's wisdom has deemed it necessary to apply this "stress test" rate to EVERYONE, regardless of their equity/down payment in their home as of January 1st, 2018.
If you follow me on Facebook (and you should...lol) you already know I vehemently disagree with the "stress test", as it seriously restricts & even prevents hard working responsible Canadians from pursuing their dreams of home ownership, but then that same government introduces the $40 billion "National Housing Strategy" to help with affordable housing and strengthen the middle class??
Am I the only one to see a bit of a disconnect between these two programs?
BUT, TO END ON A GOOD NOTE - Our provincially regulated lenders, the Credit Unions that I use (and love) for the majority of my clients financing needs...HAVE DECIDED NOT TO IMPLEMENT THIS NEW January 1st, 2018 RULE, So it's business as usual @ Chris Heidt Tekamar Mortgages Ltd.