- Brandon Nishi
TD First Big Bank to Reduce Mortgage Rate
Due to the recent coronavirus outbreak, investors are looking to put money into government bonds as a safer way to invest.
The conventional 5-year government bond was around 1.60%+ before the coronavirus, and is now dropping to 1.34% after the virus hit.
With TD as one of the first banks to reduce their mortgage stress test to 4.99%, others are watching to do other banks to reduce their bench rate as well.

What does this mean for a homebuyer?
- This means borrowers need approximately 1.8% less income to qualify for a mortgage (Assuming 20% downpayment)
- This will be the first time the stress test dropped below 5% since January 2018
- Although not very impactful change for homebuyers, it is a slowly changing to help improve the improving housing market
Looking to purchase a house in the near future? Think mono-lenders
- Mono-lenders have the same credibility as the large banks. Yet, they have slightly different ways of using the stress test. Whereas most banks must adhere to the +2% stress test posted by the Bank of Canada. Certain lenders have the ability to qualify at rates such as 0.75%.
- This leaves homebuyers more power to purchase, and an opportunity to get a lower interest rate