What is the Stress Test?

The new," Stress Test" on mortgage rates brought in by the Federal Government now effects almost everyone unless of course you don't need a mortgage. What this means to you as a buyer is this, you now have to Qualify at 2% over the rate your lender is giving you, it doesn't mean you have to pay more just that you must be able to prove that you can pay more. This also means that a buyer cannot afford as much as they could before the stress test. With the housing market at an all time high in many areas of Canada I read that this has inhibited almost 50,000 first time buyers from buying a home since it's inception. This is also means that before you sell it's important to make sure you can qualify for your next purchase otherwise you may end up not being able to buy, or you may have to buy a lot less then you currently have. This Stress Test in my opinion is not good for Canadians and was only brought in because the Federal Government is worried the Real Estate market is unaffordable to Canadians and are worried that a repeat of 2008's market collapse could happen again. Now that many first time buyers can't afford a new house and many sellers are staying put the Federal Government has initiated it's own, "Self Fulfilled Prophecy".

George Roach

George Roach

REALTOR®
CENTURY 21 Arbutus Realty
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