Posted June 8, 2021 14:49
As of June 1 of this year, the rule to qualify for a mortgage loan has changed, after the federal government increased the minimum financial bar.
The increase in the "stress test" is now 5.25% or two full percentage points above the mortgage rate that a buyer can afford. Representing, about half a percentage point above where it was before.
A measure already known to some and that was implemented in 2017 when it was sought to cool the real estate market. Now, what is the stress test? This is nothing more than the minimum threshold that anyone applying for a home loan in Canada must meet.
Reading this, you may be wondering if this means that you have to pay a more expensive loan and the answer is no. What this measure does is guarantee that you can continue to pay the monthly cost of the mortgage in case current interest rates rise.
Although the stress test recently went into effect, April gave indications of a market that began to cool after a historic March, where the median cost of a home increased nearly 30% in one year.
With this new measure, it is expected that the purchasing power of properties will be reduced by 5% and with it a fall in their price. In the medium term, this measure can make it easier for those looking to acquire a property for the first time.
Do you want to know more about the current market and the opportunity to acquire a home? Contact me, scheduling a One-On-One consultation with me through the following link: https://lisbethherrera.com/meet