Now we’re where we were talking about the mortgage stress tests. Should you be stressing because of the stress test now the good news is the mortgage rates are super, super low right now. If you haven’t started getting pre-approval for your new place. I strongly recommend you do so because you can lock that rate before he goes up. Anyways, what the mortgage stress test is, is basically in Canada the new rule is that you as the applicant have to get approved at a rate of 2% higher than the current rates. So let’s just say you go to a lender you get approved for a 2% mortgage rate for a five-year fixed. With a 5% down payment. They’re going to be looking to calculate their numbers based on 4% instead of 2%.
Why? Because they want to make sure you can afford to keep paying your mortgage in case the mortgage rates do climb up higher than the 2% that it is right now. Or another thing we look at is they look at the Bank of Canada’s last five years’ benchmark rate to get you approved
