Satish Sukul, Mortgage Professional

Further to my previous post, the Bank of Canada recently changed the stress test rules as of June 1, 2021. With these changes, now both insured and uninsured mortgage borrowers will be subject to a stricter stress test when qualifying for their mortgage. The new qualifying rate on uninsured mortgages where the down payment is 20% or more is now the contracted rate plus two percentage points or 5.25%, whichever is higher. What does this mean for you? The implementation of these tougher stress test rules will reduce buying power by roughly 4-5% for borrowers. Meaning that if previously you could qualify for a $500,000 mortgage, today you would qualify for $475,000-$480,000.

June 1st the qualifying rates moved from 4.79% to 5.25%; what this means is you will need either a. more income or b. take lesser mortgage amount to purchase a property with the new rate.

want to take advantage of the low rate environment? There are several advantages to doing so and can save and MAKE you thousands of dollars. Message me to find out more.

Before COVID19, most lenders only needed to see a pay stub from as recently as 60 to 90 days previous to the closing date. Now, those same lenders are insisting on seeing a pay stub from within 14-days and some within 30-days. You have to be able to prove that the pandemic hasn’t affected your finances and you're ability to repay the mortgage.

Great read, from @sallytherealtor https://www.facebook.com/317463008923731/posts/411298712873493/

Interesting outlook on the housing market, quick but insightful read. highlights on what CMHC is predicting 1. Canadian Sales will peak between 2020 and 2021 2. Rising house prices over next few years... 3. New builds will plateau The last point is interesting for investors. If supply of new builds outweigh demand then prices will start to creep up of those as well. https://torontostoreys.com/2019/11/housing-market-trends/

fixed vs. variable; the great debate! people always ask me for my opinion, I can only give the fact that traditionally variable has performed better (last year not withstanding) However the most important thing to consider is your personal risk tolerance. If you prefer to know your payments and interest and can't handle fluctuations then go fixed...if you can and want to potentially pay less interest then go variable. No one should tell you which way to go, it's all about your comfort which is most important!

The Bank of Canada (BOC) is kept the overnight rate unchanged, therefore the Prime Rate is also unchanged. . With on going economic issues globally, expect the BOC to keep the overnight rate as is for the foreseeable future with the likelihood of a rate cut by the end of the year/beginning of next year. .

Lower qualifying rates means you can get more approved on a mortgage. The banks don't use your actual rate when calculating your debt ratios, they are obligated to use the Bank of Canada stress test rates aka qualifying rates. Most banks will need a total debt ratio of 44% (although some alternate lenders can go up to 50%). What does this mean? Well, all your monthly debts (credit card, loan, line of credit, and mortgage payments, as well as property taxes and heating co...sts) as a percentage of your gross monthly income. So lower qualifying rates mean lower payments which means you can afford more!! https://www.bnnbloomberg.ca/bank-of-canada-lowers-qualifyin