What You Need to Know About the Proposed Changes to The Mortgage Stress Test

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. 


It’s important for home buyers to understand that these changes won’t increase their actual costs, but will impact the limits on what they’ll be able to borrow. For example, home buyers who are hoping to qualify for a $800,000 loan may only qualify for $750,000 after the changes take effect. These measures will impact all homebuyers, which actually may help cool the overheated market in some parts of Canada.


While the changes will provide some needed stability for Canadians, it will make buying a home out of reach for some, meaning they’ll miss out on the opportunity to invest in real estate as a tool in increase their wealth. 

Now’s the Time to Buy A Home with Sue Heddle Homes 

Today’s market can be overwhelming but the team at Sue Heddle Homes can help. With more than a decade of experience, we know we can help you meet your real estate goals and find you a home that works for your needs and your budget. To find out more about buying a home in Oakville or the Halton region, contact us or give us a call at 416-906-7998.

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