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New Rule Should Make You Act Quickly to Apply for Mortgage Online

Apply for Mortgage Online

NEW MORTGAGE RULE THAT COULD REDUCE YOUR BUYING POWER UP TO 20% - ACT QUICKLY AND APPLY FOR A MORTGAGE LOAN ONLINE

Buying a home? You may want to apply for a mortgage loan online now. As of January 1, 2018 your buying power could be reduced up to 20% with the implementation of the latest mortgage rule. The Office of the Superintendent of Financial Institutions (OSFI) has made some significant changes that will affect Canadian’s who are not only looking to purchase but refinance as well.

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>> Act Now to Get your Mortgage Application Started Online <<

Earlier this year the Canadian Government announced a “mortgage rate stress test” which required home buyers with less than 20% down-payment, to qualify at the posted benchmark rate. Effective as of January 1, 2018 all Canadian’s purchasing a home will be required to qualify at either the posted benchmark rate OR 2% above the obtained mortgage rate (whichever is greater), regardless of their down-payment amount. These tightened lending rules make it more important now than ever to work with the best mortgage brokers to ensure you have secured your lowest rate and are in the best product for your personal situation. Act quickly and apply for a mortgage loan online, if you obtain a signed purchase agreement prior to January 1, 2018 and a mortgage approval from a lender, you will be exempt from the new mortgage guidelines.

What does this mean for you as a buyer?

Here is an example:

Even if you placed a 50% down-payment and secured a 5 year fixed rate at 2.99%, you would have to qualify on a rate of 4.99% (2.99% + 2% = 4.99%) OR the posted benchmark rate.

This would result in reducing the mortgage amount you would qualify for, therefore reducing the potential purchase price for a new home. On average this would bring down buying power by approximately 14%-20%.

Buying power before and after January 1, 2018

  • Buyers have a household income is: $120,000 per year.
  • A down payment of up to $180,000 (if you are putting at least 20% down)
  • $120K Annual Income/20% down

Today:   

  • 5 year fixed rate, 2.99%
  • A 30 year amortization.

= Max Purchase Price $900K

With a down-payment of $180K = MAX MORTGAGE $720K

After Jan. 1, 2018:

  • 5 year fixed rate, 2.99% + 2% = 4.99% OR posted benchmark rate (whichever is greater)
  • A 30 year amortization

= Max Purchase Price $800k

With a down-payment of $180K = MAX MORTGAGE $620K

***IMPORTANT - If you act quickly and obtain a signed purchase agreement before January 1, 2018 and a mortgage approval from a lender, you will be exempt from the new mortgage guidelines.***

For more information, call us now at 604-669-6006 OR apply here to start your approval in just 30 seconds.

*For illustration purposes only. Rates are subject to change OAC. Individual lender guidelines apply.