Mortgage Qualification Just Got Harder

Mortgage Qualification Just Got Harder

Mortgage Qualification Just Got Harder because a rate changed.

The Bank of Canada has raised its conventional five-year mortgage rate from 5.14% to 5.34%.

Any home buyer with a down payments of less than 20% must be able to afford payments at this new rate.

For those who do not require mortgage insurance, the rate is one of the two stress test benchmarks used, the other being the contractual mortgage rate plus two percentage points.

The Canadian Press says that the rate increase coincides with an estimated 47% of mortgages that are due for refinancing in 2018, based on a CIBC Capital Markets report.

The big five banks have also recently increased their 5-year FRM rates. When Toronto Dominion increased its rate it was called the “biggest move in years”.

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