Is the stress test stressing you out? Got you doing financial gymnastics to buy a house? Or got you strategizing like a quarterback at halftime? For some, home buying has never been more complex. If this is you, read on!
Stress Test
As part of a national association of mortgage professionals, one of the things I continuously look at is the impact government mortgage regulations has on Canadian home buyers. Recently, the Canadian government implemented the "Benchmark Rate" or "Stress Test", meaning all Canadians must qualify at the rate set forth by the government (currently 5.34% for insured mortgages or the contract rate + 2% for uninsured mortgages as of June 22, 2018) - even if the rate the interest rate the consumer is paying is less. We estimate this reduces the consumer's buying power by approximately 20-25%, therefore creating situations where home buyers aren't able to qualify at the purchase price they are used to or for a comparable home in a new market when they're moving from province to province.
Relocation - Military and RCMP Families
This can be especially true for military families who have the unique situation of living in multiple geographic locations, and subsections of regions resulting in fluctuating markets.
As a member of a national association, I'm interested in hearing your feedback on how this has affected your homebuying ability in Canada to have an informed discussion when invited to the government regulatory discussion.
Questions
Did you purchase below your desired budget because you didn't qualify as a result of the stress test?
Have you been forced to rent because the stress test reduced your purchase price and you couldn't afford a comparable house in your new market?
Any other challenges, successes or general feedback?
Hit Me With It
I want the good, the bad, the ugly. Your qualitative examples is valuable feedback to present to government. A collective voice can be have the power to make positive changes. I want to hear from you and can share your story annonymously or with your name. Send me your story sarahnm@mortgagegroup.com
Sarah Nixon-Miller
Mortgage Broker
Toll-free Across Canada 1-844-315-6609