{"id":16696,"date":"2019-07-29T09:26:18","date_gmt":"2019-07-29T13:26:18","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=16696"},"modified":"2019-08-07T14:22:10","modified_gmt":"2019-08-07T18:22:10","slug":"its-now-easier-to-pass-the-mortgage-stress-test","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/","title":{"rendered":"It\u2019s Now Easier to Pass the Mortgage Stress Test"},"content":{"rendered":"\n<p><br><strong>By Ratehub.ca<\/strong><\/p>\n\n\n\n<p>Home buyers will now have an easier time qualifying to purchase a home, thanks to a recent rate change by the Bank of Canada.&nbsp;<\/p>\n\n\n\n<p>The central bank announced a decrease to its qualifying mortgage rate, dropping it from 5.34% to 5.19%. So, what does this mean for home buyers? Well, it lowers the minimum mortgage amount Canadians need to qualify for. Let us explain.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is the Mortgage Stress Test?<\/h2>\n\n\n\n<p>In early 2018, the Office of the Superintendent of Financial Institutions (OSFI) implemented a mortgage stress test that requires home buyers to qualify at a mortgage rate that is the higher of the Bank of Canada\u2019s benchmark rate or two additional percentage points to their contract rate.&nbsp;<\/p>\n\n\n\n<p>The stress test was put in place to ensure Canadians don\u2019t take on any mortgage debt that they couldn\u2019t be able to pay off, in the event of future rate increases. It essentially forced home buyers to purchase more affordable houses than they could have previously qualified for.&nbsp;<\/p>\n\n\n\n<p>In real terms, this means that a home buyer who gets a five-year fixed-rate mortgage of 2.54% (currently the&nbsp;<a rel=\"noreferrer noopener\" aria-label=\"best mortgage rate in Ontario (opens in a new tab)\" href=\"https:\/\/www.ratehub.ca\/current-mortgage-rates-ontario\" target=\"_blank\">best mortgage rate in Ontario<\/a>) would have to prove to their lender that they could qualify for the Bank of Canada\u2019s benchmark rate.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">An Increase in Home Buying Affordability<\/h2>\n\n\n\n<p>Since the Bank of Canada recently lowered its benchmark rate from 5.34% to 5.19%, Canadians are now forced to qualify at a lower rate and, thus, can afford pricier homes than they could have prior to the rate decrease.<\/p>\n\n\n\n<p>And it\u2019s&nbsp;<a href=\"https:\/\/www.ratehub.ca\/first-time-home-buyer-programs\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"first-time homebuyers (opens in a new tab)\">first-time homebuyers<\/a>, the buying cohort that faces the biggest challenges when trying to purchase a home, who will likely benefit the most, according to James Laird, president of CanWise Financial.<\/p>\n\n\n\n<p>&#8220;The change in the Bank of Canada five-year benchmark rate now&nbsp;means that Canadians can qualify for more home today compared to earlier this year and 2018,\u201d Laird said. \u201cThe decreased stress test rate alleviates some of the pressure on first-time home buyers, who are the most financially strained Canadians entering the housing market.&#8221;<\/p>\n\n\n\n<p>According to Ratehub.ca calculations, a home buyer with an annual household income of $100,000 with a 20% down payment and a five-year fixed mortgage of 2.70% amortized over 25 years would have qualified for a home valued at $589,000 at the former benchmark rate of&nbsp;5.34%.<\/p>\n\n\n\n<p>However, with the new qualifying rate set at 5.19%, they can now afford a home valued at $597,000<strong>.&nbsp;<\/strong>That\u2019s<strong>a<\/strong>difference of $8,000 (1.4% pricier home)<strong>.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Talk to a Pro About Your Mortgage Options<\/h2>\n\n\n\n<p>If you\u2019re thinking about buying a home, it can be confusing trying to figure out what you can qualify for. First, check for the\u00a0best mortgage rates in Canada and speak to a\u00a0<a rel=\"noreferrer noopener\" aria-label=\"mortgage broker (opens in a new tab)\" href=\"https:\/\/www.ratehub.ca\/blog\/pros-and-cons-and-using-a-mortgage-broker\/\" target=\"_blank\">mortgage broker<\/a>. You can also check our\u00a0Canada mortgage <g class=\"gr_ gr_6 gr-alert gr_spell gr_inline_cards gr_disable_anim_appear ContextualSpelling ins-del multiReplace\" id=\"6\" data-gr-id=\"6\">calculator<\/g> <g class=\"gr_ gr_6 gr-alert gr_spell gr_inline_cards gr_disable_anim_appear ContextualSpelling ins-del multiReplace\" id=\"6\" data-gr-id=\"6\">to<\/g> help you figure out what your monthly mortgage expenses might be.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Ratehub.ca Home buyers will now have an easier time qualifying to purchase a home, thanks to a recent rate change by the Bank of Canada.&nbsp; The central bank announced a decrease to its qualifying mortgage rate, dropping it from 5.34% to 5.19%. So, what does this mean for home buyers? Well, it lowers the [&hellip;]<\/p>\n","protected":false},"author":42,"featured_media":16698,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"footnotes":""},"categories":[196,487,468],"tags":[],"class_list":["post-16696","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-of-canada","category-guest-posts","category-mortgages-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>It\u2019s Now Easier to Pass the Mortgage Stress Test | Zoocasa<\/title>\n<meta name=\"description\" content=\"By Ratehub.ca Home buyers will now have an easier time qualifying to purchase a home, thanks to a recent rate change by the Bank of Canada.&nbsp; The\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"It\u2019s Now Easier to Pass the Mortgage Stress Test | Zoocasa\" \/>\n<meta property=\"og:description\" content=\"By Ratehub.ca Home buyers will now have an easier time qualifying to purchase a home, thanks to a recent rate change by the Bank of Canada.&nbsp; The\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/\" \/>\n<meta property=\"og:site_name\" content=\"Zoocasa Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Zoocasa\" \/>\n<meta property=\"article:published_time\" content=\"2019-07-29T13:26:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-08-07T18:22:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.zoocasa.com\/blog\/wp-content\/uploads\/2019\/07\/Easier-to-Pass-Mortgage-Stress-Test-e1564406628464.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Ratehub.ca\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Zoocasa\" \/>\n<meta name=\"twitter:site\" content=\"@Zoocasa\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Ratehub.ca\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/\"},\"author\":{\"name\":\"Ratehub.ca\",\"@id\":\"https:\/\/www.zoocasa.com\/blog\/#\/schema\/person\/bf5eea3d5f6088b686ce36a5742520e0\"},\"headline\":\"It\u2019s Now Easier to Pass the Mortgage Stress Test\",\"datePublished\":\"2019-07-29T13:26:18+00:00\",\"dateModified\":\"2019-08-07T18:22:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/\"},\"wordCount\":484,\"publisher\":{\"@id\":\"https:\/\/www.zoocasa.com\/blog\/#organization\"},\"articleSection\":[\"Bank of Canada\",\"Guest Posts\",\"Mortgages\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/\",\"url\":\"https:\/\/www.zoocasa.com\/blog\/its-now-easier-to-pass-the-mortgage-stress-test\/\",\"name\":\"It\u2019s Now Easier to Pass the Mortgage Stress Test | Zoocasa\",\"isPartOf\":{\"@id\":\"https:\/\/www.zoocasa.com\/blog\/#website\"},\"datePublished\":\"2019-07-29T13:26:18+00:00\",\"dateModified\":\"2019-08-07T18:22:10+00:00\",\"description\":\"By Ratehub.ca Home buyers will now have an easier time qualifying to purchase a home, thanks to a recent rate change by the Bank of Canada.&nbsp; 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