This week the Minister of Finance has announced that the Mortgage Stress Test rate will be decreasing. Effective May 25, 2020, the new benchmark rate used to qualify insured mortgage will be 4.94%. Previously, the Stress Test rate was 5.04%
What does that mean for borrowers? It means that you may qualify for a little higher purchase price.
Applying the previous Stress Test of 5.04% to a mortgage application where the borrower’s annual income is $60,000, the annual property taxes are $2000, and using the minimum down payment of 5%, this borrower would qualify to purchase a property valued around $290,000.
That same borrower, making $60,000 annually, with $2000 annual property taxes, and 5% down, would be able to look at homes valued slightly higher at $294,500.
There are many factors that contribute to the amount that you can qualify for and it can feel impossible to find all the answers on your own. Your PG Mortgage Broker Team has a combined 30+ years experience in the mortgage industry. We are here for ALL of your mortgage questions and are always happy to help.