The Office of the Superintendent of Financial Institutions (OFSI) is proposing more new mortgage rules that may come into effect October 2017, exactly the same time of the year that the last big changes were made in 2016.
The last round of changes affected first time buyers the most because of the increase in the qualifying interest rate for insured purchases, however, the most prominent change in the proposed rules is an increase in the qualifying rate for ALL mortgages, including refinances.
The qualifying rate is used as a “stress test” to confirm that the borrower will still be able to afford the mortgage should interest rates increase significantly in the following years.
This will affect all mortgage borrowers because if you had less than 20% down payment when you bought the home, you had to qualify for the mortgage at the Bank of Canada rate, now you will have to qualify at the Bank of Canada rate, or something similar again when your home has increased in value and/or you would like to refinance to increase your mortgage amount. This can significantly reduce your borrowing potential and impact your current and future plans.
Geoff Lee of DLC GLM Mortgage Group based in Vancouver, BC tells us more. http://ow.ly/57SY30fmu6h
If you are considering a refinance of your current home mortgage, give me a call now. Consultations are free! Anne Martin 705-791-6683