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Mortgage Qualifying Rates Are Changing (For the better or worse?)

Increasing the qualifying rate for uninsured mortgages


What's happening?

The Federal Government is proposing to increase the qualifying rate from 4.79% to 5.25% for uninsured mortgages. The qualifying rate (Stress Test) is a safety net, demonstrating that home buyers can take afford higher monthly payments if interest rates were to rise in the future.


When will this change happen?

The federal government plans to make the change June 1st. Although, this change has not been confirmed yet.


Will this affect you?

CMHC considers a mortgage, uninsurable, if your purchase/refinances fits one of the following criteria:

  1. Purchases over $1 million or more

  2. Rental Properties - Non-owner occupied properties

  3. Amortization is over 25 years (Ex: 30 year amortization)

If you're looking to purchase a property with a 5%-19.99% downpayment, this will not affect you. If you're looking to purchase a property with a 20% downpayment or more, this change will affect you.


This will generally reduce the purchasing power of many home buyers by 5-6%. A homebuyer will qualify for $450,000 now, but may only qualify for $430,000 with the new guidelines.


What should you do?

If you're looking to purchase a home, now is definitely the best time. By purchasing now, you'll be able to qualify for a higher mortgage than in a few months. You'll also be able to take advantage of the low interest rates.


If you have any questions, please feel free to give me a call, text, or email at any time.


Brandon Nishi | Mortgage Broker

P: (604) - 353 - 5809

E: Brandon.Nishi@Cleartrust.ca

A: 1665 Kingsway, Vancouver, BC.