12 April 2018

“During the previous 2-3 years, real estate prices kept rising, so many people couldn’t afford a long-term mortgage and chose short-term options,” – he noted. “And now, all challenges appeared in 2018”.

The new rules require from homebuyers searching for a mortgage from a federally regulated lender to prove their ability to service their uninsured mortgage at the greater of the contractual mortgage rate plus 2% or the five-year rate by the Bank of Canada. An existing stress test already demands qualification at the BoC’s five-year rate from borrowers with insured mortgages.

Nevertheless, borrowers who refinance their uninsured mortgages with their existing bank will not be affected by this rule. It means, banks won’t have as many reasons to offer a better rate as about five years ago during the so-called mortgage wars.

More often than not we have the ability to offer much better rates at renewal for well qualified borrowers than their branch! For example, our best variable offer for renewal today is Prime – 1.00% or 2.45%!