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New mortgage rules result in more stress...testing.

Yes, more stress... testing. As with all good training programs adding a stress will allow for future adaptation and growth. BUT we often forget this with the immediate short term stress. Plan ahead as much as possible and this will be behind us soon enough.

Yesterday, the Office of the Superintendent of Financial Institutions (OSFI)

announced new guidelines for residential mortgages that are set to come into effect as of January 1, 2018.

Uninsured mortgages will now be subject to a higher qualifying rate (or mortgage “stress test”), which, simply put, means that mortgage borrowers will qualify for less moving forward. The aim of this new regulation is to facilitate long-term mortgage affordability – this will help ensure that homeowners are not struggling to make their mortgage payments if interest rates rise in the future.

Who is Affected by this Change?

These new guidelines apply only to those putting down a minimum of 20 percent on their mortgage – these are called uninsured mortgages as opposed to insured/high-ratio mortgages where homebuyers put down less than 20 percent.