Wednesday, December 6, 2017

What's changing on January 1, 2018?

New mortgage rules unveiled by OSFI on Tuesday will require even those who don't need mortgage insurance to have their finances stress tested at higher rates.
Effective January 1st, 2018, new qualification rules will apply to Uninsured loans 
( 20% down or greater)

To my valued clients, I want to help you navigate through these new mortgage rule changes. I want to  help borrowers make informed decisions when buying a home in the new year.

WHAT'S CHANGING ON JANUARY 1, 2018?

The qualifying rate for all uninsured purchases and refinances will be the greater of:
Contract Rate PLUS 2%
OR
The Bank of Canada Benchmark Rate
There will be no change to the qualifying rate for Insured applications. ( less than 20% down) Insured applications will continue to be qualified using the greater of the contract rate or the Bank of Canada Benchmark Rate.

WHAT’S THE IMPACT ON THE BORROWER?
The new B-20 changes will have a direct impact on your purchasing power in the new year. The table below shows what a borrower with an annual income of $67K can afford today versus what they can afford in 2018 under the new rules. 

*Example assumptions include: 5 Year Fixed Rate: 3.09% / 25 Year Amortization / $700 in other monthly debts.
 
WHAT’S THE IMPACT ON THE PIPELINE?
All uninsured applications received prior to January 1st, 2018 where a commitment has been issued, will be subject to the old qualifying rules.GET YOUR MORTGAGE APPLICATIONS IN NOW!!!!!
 
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