A so-called “stress test” is now being applied to all mortgages in Canada thanks to federal changes which took effect at the beginning of this month.
Consumers now have to add 2 percent to their qualifying rate for a large down payment and it also affects anyone who is refinancing.
Heather Elliott with the Mortgage Centre in Moncton believes the new rules were designed to calm down some red-hot real estate markets but end up giving consumers less buying power.
“The Toronto’s or the Vancouver’s where people are putting their house on the market with an asking price and there are actually bidding wars going higher. So I think they are trying to temper some of those markets,” she notes.
As an example, Elliott adds if someone receives a rate of 3.29 percent, an additional 2 percent is added, which means you must qualify at a rate of 5.29 percent.
