What is the Qualifying Rate?

 

 

 

What is the Qualifying Rate?

The qualifying rate is a rate that lenders are required to use to calculate your debt service ratios when reviewing your mortgage application. It’s used to ensure that Canadians aren’t getting “in over their heads” with their mortgages, and applies to all variable and 1- to 4-year fixed mortgages. For 5-year mortgages, you are assessed on the rate your lender is offering you, which may make qualifying easier. The qualifying rate is generally higher than the rate that your lender is offering. While you must “qualify” at that rate, your actual payments will be based on your contract rate.

Michael Rauser

Michael Rauser

REALTORĀ®
CENTURY 21 Sun Country Realty
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