New mortgage rules relieve pressure for borrowers
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New rules for mortgages took effect across Canada yesterday, and while the regulations will reduce the amounts borrowers can qualify for, one mortgage broker believes the change is positive.
Under the new rules, all insured mortgage applications must pass a stress test at a higher rate to ensure borrowers can still repay their loans even if interest rates rise or their financial situation changes. Potential borrowers will not necessarily pay the higher rate, but must demonstrate their ability to cover the increased cost if need be.
Prince Albert mortgage broker Debbie Dowhay said the changes are positive, as they create a “level playing field” by requiring everyone to qualify at the same rate. Although the new rules may seem to make things more difficult for borrowers, Dowhay said the primary purpose is to prevent defaults and financial stress
“A lot of people don’t realize what impact their payments are going to have if they do go up in the future,” Dowhay said, “This just alleviates a little of that pressure.”
