Chat with us, powered by LiveChat

If you are looking to buy real estate this year you may be a bit perplexed trying to understand the new “stress test” mortgage rules that will affect your real estate purchase.

These new rules were put in place to make sure that we don’t take on excess risk and increase our debt load especially if mortgage rates start to climb. You become more aware of the “what if” scenarios that could come into play and what the burden of extra debt could mean if interest rates climb.

The new stress test has the highest impact on those buyers who need a mortgage insured through CMHC (Canada Mortgage and Housing Corporation) regardless of how much you put as a down payment. This means that when you get financial approval through a lender you will have to be approved through them and also qualify for the Bank of Canada’s 5-year fixed mortgage rate before you get your mortgage pre-approval.

For example, your lender might approve you for a 2.5% rate but you also need to pass the “stress test” of the Bank of Canada’s 5 year fixed rate at 4.64% (this rate fluctuates).

Step 1—Get a Good Mortgage Broker for Mortgage Pre-approval

The best advice would be first to go to a mortgage broker to find out how much mortgage you can carry.  They can find a lender to help you get a good rate and will also explain what this “stress test” can mean for you personally and how much purchase power you will have.

Step 2 – Contact the Winch Walton Ottawa Real Estate and Staging Team

Our Winch Walton Ottawa Real Estate and Staging Team will be able to scour the market for you to find homes in your price range. We know which houses will become available before the rest of the public and often we know if houses may be listed for a quick sale. Since this is a seller’s market houses move quickly.  You don’t want to miss out on any real estate you can afford by waiting. Often homes are sold at the first open house, so you have to be ready to move quickly. We can also help you find a broker to get you started.

Even though you may have to jump through a few hoops with these new rules, rest assured that if you seek out the right advice, it will make the transition much easier for you.

Contact the Winch Walton Ottawa Real Estate and Staging Team to help with any of your real estate selling or buying needs.

Leave a Reply