Real Estate

Qualifying Rate Expected to Change to 5.25% June 1st for some mortgages.

  • Last Updated:
  • May 20th, 2021 8:47 pm
[OP]
Jr. Member
User avatar
Aug 14, 2020
180 posts
166 upvotes
Hamilton, ON

Qualifying Rate Expected to Change to 5.25% June 1st for some mortgages.

I haven't seen anything posted here yet regarding this, but it has been coming down the pipe for a while. We have been waiting for details.
We are still skinny on details, but as of now it seems that this will apply to conventional uninsured mortgages. It is expected to reduce purchasing power by about 4%.

If you have a CMHC-type insured mortgage this may not apply. We are waiting on details about whether this will apply to conventional insurable deals like renewals or certain purchases with 20%+ down payment.
Conventional uninsured includes 30 year am, refinances, rentals and property values over $1M.

If other Agents or Brokers have more details, please share what you know as this is happening pretty quickly and will affect Purchase and Sale Agreements or refinances/renewals dated June 1 or later.


Edit: Some lenders may not distinguish between Uninsured and Insurable. If so, expect this to affect every mortgage except those insured with CMHC/Sagen/CG.
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Getting a mortgage is like writing a test...except you're allowed to work with someone who knows the answers!

Kirby Reschny
Mortgage Agent
Real Mortgage Associates (FSRA #10464)
11 replies
Deal Addict
Jan 1, 2013
1845 posts
1054 upvotes
Durham
Lenders are swamped because of this. Anytime something like this is "recommended" it usually does pass, hence the rush.
Member
Aug 13, 2020
422 posts
471 upvotes
This was under consideration.. is it confirmed?
[OP]
Jr. Member
User avatar
Aug 14, 2020
180 posts
166 upvotes
Hamilton, ON
We expect that after this comes in, insured mortgages won't be far behind.
_



Getting a mortgage is like writing a test...except you're allowed to work with someone who knows the answers!

Kirby Reschny
Mortgage Agent
Real Mortgage Associates (FSRA #10464)
Deal Expert
Feb 29, 2008
15132 posts
11612 upvotes
Tarrana
a bunch of nonsense....RE market in Canada continues to be the safest bet around because of all the changes. Every month there's a change.
Member
Aug 13, 2020
422 posts
471 upvotes
OSFI has confirmed the change in stress test.
Deal Addict
Jan 15, 2017
4332 posts
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Ottawa
DealFind25 wrote: Change applied to insured mortgages also.
Strange as the news release only mentions uninsured mortgages:

"Quick Facts

As of June 1, 2021, the revised calculation of the minimum qualifying rate for uninsured mortgages will be:
The greater of the contract rate plus 2% or 5.25%.
OSFI will review and communicate the qualifying rate at a minimum annually, every December, well in advance of the high-volume housing spring season."

https://www.osfi-bsif.gc.ca/Eng/osfi-bs ... -0521.aspx
Member
Aug 13, 2020
422 posts
471 upvotes
Saw on Bloomberg, seems like OSFI can only announce for uninsured. The insured change was announced by Finance Ministry.
Deal Addict
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Oct 24, 2005
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Burlington
Will be interesting to monitor what this change means for prices. Will only the expensive homes suffer while the cheaper TH/semis will go up?
Deal Expert
Feb 29, 2008
15132 posts
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Tarrana
Tha_Doggg wrote: Will be interesting to monitor what this change means for prices. Will only the expensive homes suffer while the cheaper TH/semis will go up?
All these stupid stress test rules do is lower the ceiling and raise the floor. It is so mind-numbingly stupid. So the lower end will certainly go up.

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