Mortgage Stress Test Announcement Canada



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New Canadian Mortgage Stress Test Announcement!

Following in the footsteps of OSFI’s announcement regarding Uninsured Mortgages taking place June 1st 2021, the Minister of Finance announced that all high ratio or insured mortgages would also need to qualify on the higher of contract rate + 2% or 5.25%

This will, on average, reduce purchase price buying power by 4-5%

What is an Insured mortgage?
An Insured mortgage is one that must follow default insurance guidelines.
These guidelines include:

1. Owner Occupied Purchase or Second Home purchase
2. Owner Occupied High Ratio Transfer
3. Less than 20% down payment on a purchase
4. No more than a 25 year amortization
5. GDS/TDS ratios not exceeding 39/44
6. Minimum Beacon Score requirements

Who will this impact the most? You got it…First Time Buyers.

What are your thoughts? Comment below!

OSFI Announcement: https://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/b20-nr.aspx

Department of Finance Announcement: https://www.canada.ca/en/department-finance/news/2021/05/statement-by-the-deputy-prime-minister-and-minister-of-finance-on-the-canadian-housing-market.html

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