There is mention of the Bank of Canada changing the mortgage qualifying rate ( stress test rate ) from 5.34% to 5.19% in the next couple days. A couple of big banks have already decreased their posted rates to 5.19% in anticipation. You will likely see this across the media shortly.
Before we all get excited, what does this mean?
This change only makes about a 1% difference in how much more you would qualify for. Buyers previously approved for a $700,000 purchase will now be able to go up to $707,000 in this example.
This change will apply to insured ( less than 20% down) and also conventional ( 20% or more down ) mortgages.
While the change is minor, it is a step in the right direction.
On another note, bond yields continue to increase thus putting pressure on fixed rates to increase. We have already seen a couple of lenders cancel some rate specials and slightly increase rates.
If you're planning on purchasing a property this year it would be a good idea to lock in your rate which you can do for 120 days.
As always, please reach out if you have any questions. If you have any questions about getting a mortgage, let us know. We'll get you in contact with one of our amazing Mortgage Brokers.