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The Stress Test Explained

Don't let the new mortgage “stress test” surprise you on January 1, 2018

Your borrowing power could be reduced by as much as 20%!!!

What is a Stress Test?

On January 1, 2018, the government will set a new minimum qualifying rate, or “stress test,” for mortgages with a 20% or greater down payment.

These new rules will place the minimum qualifying rate for to be either

- the five-year benchmark rate published by the Bank of Canada
- the bank’s contracted mortgage rate, PLUS 2.0%


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So what does this really mean for you?

If you walked into a bank with an annual income of $100,000 and a $20,000 down payment and wanted a five-year fixed mortgage of 3.09% amortized over 25 years.  You would qualify for a $706,692 maximum purchase price** for a new home.

But starting January 1, 2018... 
If you walked into the bank with the same money and goals, you would only qualify for a $559,896 maximum purchase price on a new home. 

Your buying power would be reduced by $146,796 (-20.77%)!!!

So what can you do about these changes?

Contact us to find out how we can help you BEFORE these changes come into effect.

Obtain a signed approval before January 1, 2018, and be exempt from the new mortgage rule.

Call us at 604-669-6006

Or take 30 seconds to apply online.

We are here to help you understand the new Mortgage Stress Test.