The Canadian government has proposed new rules related to the mortgage stress test which would take effect on June 1, 2021. To review, the mortgage stress test was introduced by the government to help limit the number of Canadians who run into financial trouble by overextending themselves by assuming a mortgage they can’t comfortably pay for.
As the real estate market has experienced continued growth and significant price increases during the global pandemic, many have been calling for regulatory changes in order reduce the risk of a market crash and to stop Canadians from assuming too much housing debt.
Here’s How These Changes Will Affect You
The proposed changes will increase the minimum qualifying rate for an uninsured mortgage from 4.79% to 5.25%. As a result, it will make qualifying for a mortgage more difficult for many Canadians. Simply put, on average, home buyers will be able to qualify for four to five percent less in funding because of this change....