Stress Tested

Stress Tested

There were plenty of complaints when the OFSI increased the stress test rate from 4.79% last year to 5.25%. At the time the concern was it would remove a lot of buyers from the housing market and cool things off. Well at least this was the goal but it never happened. In hind sight it was good that the stress test rate was increased as it proved that consumers could afford the higher rates if they happened.

So all those who closed last year and chose a variable rate, remember when you were stress tested it was proven that you could afford the higher rates. While you were loving the fact that your mortgage was in the 1% rate for last year. Now with the recent increases to prime you are still in the mid to high 2% range. Still well below the 5.25% stress test rate.

Now the people who close this year, the stress test rate is no longer 5.25% as it will now be the contract rate + 2%. So a current five year fixed rate of 4.89 now has a stress test rate of 6.89. The variable are tested at 5.25% or the contract rate +2% which ever is greater. That means currently 5.25% is the number for variable.

I look forward to hearing from you in regard to your mortgage needs.


p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here