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What are the rule changes?

Under OSFI’s (Office of the Superintendent of Financial Institutions) new rules, borrowers with a 20% downpayment will be “stress tested” when applying for a new mortgage.

Anyone considering an equity takeout on their home (or otherwise known as a refinance), will also be subject to the stress test.

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What is a stress test?

The “Stress Test” is OSFI’s way of making sure the borrower (you), can withstand a higher mortgage payment if interest rates increase. The “stress test” is set at 2% more than what you’ll actually pay. For example, if your mortgage rate is 3%, you’ll have to qualify for a 5% interest rate payment.

Under existing rules, if you qualify for a maximum mortgage amount of $300,000, you may only qualify for $260,000 under the new rules.

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Most importantly, will this rule affect you?

Under OSFI’s (Office of the Superintendent of Financial Institutions) new rules, borrowers with a 20% downpayment will be “stress tested” when applying for a new mortgage.

Anyone considering an equity takeout on their home (or otherwise known as a refinance), will also be subject to the stress test.

If either of these situations apply to you, please contact us by email or phone to discuss. Timing is key because lenders over the next few months will be very busy and approval times will be slower than normal.

The new rules will take into effect January 1, 2018. Let us help you navigate through this important mortgage change.

Read more on OSFI’s press release.