Mortgage Qualifying Rates Reduced

Mortgage Qualifying Rates Reduced

Jul 22, 2019 | Finance, Local, Real Estate

Following a recent BC Real Estate Association report claiming housing sales would have been 10% higher in 2018 had it not been for the B-20 Stress Test, the Bank of Canada adjusted the qualifying rate for mortgages for the first time since 2016. Although May saw an increase in sales activity in BC, it seems that the stress test policy introduced last year is putting up a hurdle for first-time buyers, considering last month’s news that average home prices in Kelowna would have to drop by $239,000 for most Millennials to get into the market. So, how will this change affect first-time buyers?

The B-20 Stress Test was introduced last year to make sure mortgage-seekers could deal with worst-case financial situations such as higher interest rates. It initially applied only to insured mortgages and down payments of less than 20%, but it’s since expanded to cover uninsured mortgages and higher down payments as well. By reducing the minimum mortgage qualifying rate from 5.34% to 5.19%, it will theoretically be easier to qualify for an uninsured mortgage.

With this new change, and many affordable single-family homes are currently on the market, and a dedicated realtor can help to ensure that you’re getting a home you can love and afford. Get in touch today to learn more about your options – let’s start this journey together!

Additional Reading

Housing Prices Starting to Stabilize

    Earlier this year the government introduced the Speculation Tax in an attempt to slow the accelerated housing price growth in the province of BC. Now, several months after this regulation was implemented, reports are claiming that, as of July, the average sale...

Active Listings on the Rise!

    Last month, the Bank of Canada announced that they would be lowering the mortgage qualifying rate for the B-20 Stress Test in hopes that it would allow more people to access the real estate market. This good news came after the BC Real Estate Association’s (BCREA)...

May Heats Up the Market

    While most of the Canadian market is slowing down and showing signs of a pricing decline later this year, the month of May had the best sales activity yet. Although affordability continues to remain questionable, reports indicate that housing prices are decreasing...

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