The new mortgage stress test, which comes into effect on January 1, will make it harder for most buyers to purchase a home.
1. Why? From January 1, all homebuyers will be tested against a higher minimum qualifying rate – even with a down payment of 20 per cent or more.
2. How can you avoid this? Buy and close on an immediate possession home in 2017 (before January 1), and the current rules still apply.
3. What’s going on? On October 17, the Office of the Superintendent of Financial Institutions announced a new qualifying rate for homebuyers with a down payment of 20 per cent or more. The rate extends existing rules that apply to homebuyers with a deposit of less than 20 per cent, and takes effect on January 1.
4. What is the new test? Buyers must meet a minimum qualifying interest rate equal to the Bank of Canada’s five-year benchmark rate (4.89 per cent), or the rate they sign up for plus two percentage points – whichever is higher.
The rules effectively reduce the size of the mortgage a person can take on, with a given down payment and income.
5. Why is this happening? The Government has acted to dampen activity and housing prices in Canada’s two hottest markets, Ontario and Vancouver, commentators believe.
If you’re in the market to buy a home in 2018, consider buying your new home NOW to get what you want.
Slokker Homes has immediate possession homes available in:
- Canals Townhomes in Airdrie (1 left)| Call Jody/Peter: 403-608-9827
- Axess in Currie, Calgary (74 per cent sold)| Call Tanya/MiJin: 403-671-5737
- Jumping Pound, Cochrane (6 left)| Call Krista/Gabe: 403-401-9283
- Griesbach, Edmonton (8 left)| Call Esther: 780-399-4591
- Oakmont Townhomes, St. Albert (7 left)| Call Andriana: 780-490-9546
Contact one of our Area Sales Managers listed to discuss your needs.