More Stress Tests

Hamilton and Southern Ontario almost was blown away last week. Along with lost power and downed trees, we also received higher mortgage rates meaning more stress tests. We want you to understand what this all means in simple terms at our Mortgage Architects Office located on the East Hamilton Mountain.

Along with escalating mortgage rates, a softer real estate market, our growing debt and the new stress tests imposed by the government, the market will need to adjust.

Let’s look at how:

1. Rising rates will make the Real Estate market more troubled. Although rates went up slightly, it still affects a portion of the population who has a breaking point.
2. When rates rise, your overall personal debt payments go up which take out a bigger chunk of your personal income.
3. It appears the banks and the government are about to increase their stress tests requirements. Unfortunately this is what really stings. Currently the government stress tests qualifying rate is now 5.14%. In other words, to receive a mortgage you must first qualify at the higher rate. Well guess what, they believe this new qualifying rate will climb as high as 5.34%.

Again, fewer people will now qualify for a Canadian mortgage.

If you are one of the homeowners who has a lot of debt, restructure while you can so that you can get your financial house in order. Some positive news is that variable rates are appearing to be attractive again. As well for the many Canadians who are renewing their mortgage, you will not be put under the mortgage stress tests. Although you probably will be renewing with higher rates than previous.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

If you would like to apply for a mortgage online, please follow this link.

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Thanks for reading!