As some of you may know that we have a mortgage stress test or qualifying rate of 5.25%. This is to help insure that when you are qualifying for a mortgage you will still be able to make the payments if and or when the rate changed to 5.25%. What many of you may not have heard is that this qualifying rate or stress test rate has now increased.
Actually it has not changed but it has increased so let me explain. The way the stress test works is that it is based on the contract rate ( your mortgage rate) plus 2% or 5.25% which ever is greater. The stress test rate of 5.25% has not changed but the mortgage rates have thus moving the qualifying rate now above 5.25%.
Rates have been increasing as bond yields have changed … Read more