Because we are the mortgage broker Toronto that cares about our clients, we’ve put together a few words on the mortgage stress test. It’s important to us that each and every one of our clients gets all the information they need to make the right decisions.
We know how tough it is to qualify given the requirements and the house prices in today’s market. That’s why we wanted to put together a few points on this stress test that might help you over any hurdles.
Mortgage Rules
January of last year is an important date. That’s when the mortgage rules were changed and applicants needed to be able to prove they could make payments at a rate they qualified for plus two more percentage points or the five-year benchmark rate from the Bank of Canada.
The idea here was to decrease the number of people who defaulted on their loans. Banks and other lending institutions wanted to be sure people could continue to make payments over the course of an entire term if the rates went up.
Lid on Defaults
As you might’ve expected, there are people arguing on both sides of this new rule. For example, people who back the new mortgage stress test say that it’s one of the best ways to keep a lid on defaults and an excellent tool to manage the way consumers leverage buying power.
In other words, these people are saying it’s a financially responsible way of making sure that others can afford the money they borrow.
Another Side
Of course, there’s another side to the argument that we wanted to share. There’s a view that worries about qualified people being kept out of the mortgage loop with the stricter rules. In fact, there is even a report from the Globe and Mail that suggests up to 50,000 people could be left behind.
As your mortgage broker Toronto, we feel it’s important that you understand both sides of this issue.
