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How will the NEW Stress-Test Rate affect you?

Are you interested in getting ready to buy a new house in Toronto? Have you ever heard of the Stress Test Rate? The stress test came about over concerns that the mortgage/real estate industry was growing too rapidly in Canada. The stress-test helps determine if the borrower would still be able to afford their mortgage even if the rates rise.

Well, it is official, as of June 1st the stress test rate will be increased to 5.25% (up from 4.79%).

When the change was first proposed in February 2020, it was only for uninsurable mortgages (20% or more down payment). In an unexpected move, the Ministry of Finance followed suit and also made the change to mortgages with less than 20% down payment. With the new qualifying rate, on average it will decrease affordability by 4%- 4.5%. “The main reason we’re setting a 5.25% rate is because we feel a responsibility to make sure the financial system is ready in case we have to return to pre-pandemic conditions,” says Superintendent of Financial Institutions Jeremy Rudin.

All my clients are up to date on how this will affect them. If you or any of your friends are in the market to buy within the coming 6 months, let's talk to find out if your affordability has been affected.

Regardless if you are affected by the new rules or not, having the expertise of a Realtor who is connected to many expert mortgage advisors on your side matters now more than ever. There are a variety of options and solutions to help my clients to buy their dream homes. We have helped non-resident, resident, new comers, investors, USA based clients, you name it!!

Who do you know that could be affected by the new regulations?

To find out how the new regulations might affect you or if you want to know how your neighborhood is getting affected as we roll into this, let's connect....

If you are interested in buying or selling your home, please click the “Contact” button on my website and send me an email!

Mayssoun Hatoum


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