New Mortgage Rules
October 29, 2017
The final revisions of the new mortgage rules were released on Tuesday by the Office of the Superintendent of Financial Institutions (OFSI).
Effective January 1, 2018 and regardless of your down payment amount, the OSFI will enact a new minimum qualifying rate, aka ‘stress test,’ equivalent to the greater of the five-year benchmark rate, currently 4.89% or 200 basis points above the borrowers approved mortgage rate. Previously only those buyers with less than 20% down were required to meet the guideline following similar changes in late 2016. That means under the current rules; a Buyer with a $100,000 a year salary might be able to afford $934,247 with a 20% downpayment. Under the new rules, that same Buyer might only qualify for a maximum of $774,927!
While it’s anticipated that this further tightening will continue to cool the single family market, a 5-10% drawdown in the condo/townhouse sector may do little to slow it's pace. If you've considered Buying or Selling a home in the next year, please call or email me to discuss your options and to learn more about the upcoming rule changes. I'm always happy to help. 778-288-4481