Stress Test on all Mortgages could soon be coming!

A rule already in place for insured mortgage borrowers (those that purchase with typically less than 20% as a down payment) could soon be coming to all mortgage borrowers.

The¬†Office of the Superintendent of Financial Institutions (OSFI) is contemplating brining in changes that will make it mandatory that all mortgage borrowers go through a “Stress Test” (as if anyone who has gone through the buying process over the past many¬†years haven’t experienced enough stress!) when qualifying for a mortgage.

Talk on the street is that everyone will need to show they can cary a monthly payment that’s 2% higher than the rate they are looking at. Some are saying this could knock approval amounts down by as much as twenty percent! Many think this could flatten the Toronto real estate market.

What will this mean for house prices, it’s too early to say. But it seems that both at the Provincial and Federal levels, governments are hell bent on cooling the housing market.

We should know more soon but for anyone contemplating making a purchase, make sure to reach out to your mortgage professional to find out what this could mean to your affordability.

For questions on what effect this might have on the sale price of your property, contact me and I would be happy to discuss further.

With many changes on the mortgage side over the past few years these seem to have been effective like jabs in a boxing match. Will this new change amount to the knock out punch they’ve been looking for? Time will tell.

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