New stress test for uninsured mortgages as of January 1, 2018
The Office of the Superintendent of Financial Institutions Canada (OSFI) has thrown down the gauntlet once again. If you were planning on purchasing real estate with a down payment of 20% or more, you might want to consider doing it before January 1, 2018.
For any 5 year or greater fixed rate mortgage, 20% down payment or more, you can use the contract rate(the interest amount the borrower pays) to qualify for the transaction instead of the Bank of Canada qualifying rate(currently 4.89%). As of January 1, 2018 this will change to the greater of the following:
1.) Bank of Canada qualifying rate
2.) Contract rate + 2%
What this means is that the people who can put 20% or more as a down payment might have to qualify at a interest rate higher than the people who only put 5% down.
