A VIP update on Lending Practices for those considering to buy in the near future: Recently the Office of the Superintendent of Financial Institutions (OSFI) released revised guidelines for the mortgage industry.
These new parameters will take effect January 1, 2018.
Below are comments & examples of impact from a Mortgage Broker:
These new guidelines include a stress test for uninsured mortgages or mortgages with more than a 20% down payment or 20% in existing equity.
This new stress test means that borrowers will be qualified at the greater of their contract rate + 2% or the five year benchmark rate published by the Bank of Canada, which is currently 4.89%.
To give you some numbers, per $100,000 in mortgages.
Based on an interest rate of 3.29% with a 25yr amortization.
CBC news article: http://www.cbc.ca/news/business/osfi-mortgage-rules-1.4358048
If you have any questions, please give me a call: 7804997720
John J Fraser, REALTOR® www.jfsells.com
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